Webster Financial, one of the biggest players in the health savings account market, has agreed to buy a cloud-based HSA platform provider.
The $65 billion asset bank expects to complete its acquisition of Bend Financial before the end of March, it announced on Wednesday. Financial terms were not disclosed.
Bend, which was founded in 2017 and is based in Boston, provides a digital platform to help individuals and employers track and manage their health savings accounts.
Once the deal closes, Bend will continue to serve customers as usual, Webster said. Over time, Bend’s digital capabilities will be extended to HSA Bank, a subsidiary of Webster that has 3 million customers and $7.4 billion in deposits, or approximately 12% of the national HSA deposit market.
The acquisition of Bend “demonstrates Webster’s commitment to improving HSA Bank’s customer experience through strategic technology investments,” Webster Chairman and CEO John Ciulla said in a press release.
Last month, Ciulla told analysts that Webster planned to launch a “new digital experience” for employers who use HSA Bank.
The agreement “accelerates” Webster’s ongoing efforts to provide a better digital user experience for consumers using HSA Bank, Chad Wilkins, president of HSA Bank, said in the statement.
All 30 Bend employees, including executives and developers who will expand HSA Bank’s digital capabilities, are expected to remain on board after the acquisition, a Webster spokeswoman said.
Webster, of Stamford, Connecticut, has invested in the HSA business for years.
In 2015 he acquired JPMorgan Chase’s HSA business, which more than doubled the size of Webster’s footprint in the market.
In 2021, HSA filings at Webster increased 4% from the prior year, according to the company’s latest earnings report. In addition to deposits, the bank’s HSA business had $3.7 billion in assets under administration through linked investment accounts at the end of last year.
Webster’s latest M&A deal comes 15 days after closing the deal acquisition of Sterling Bancorp in Pearl River, New York. This $5.1 billion transaction was announced last April and approved by the Federal Reserve in December.