UK-based fintech startup Monzo has withdrawn its application for a banking license in the U.S. The digital-only bank’s decision comes after talks, which didn’t seem to go well, with regulators at the Office of the Comptroller of the Currency.
Monzo applied for a banking license in the U.S. in April last year. Its aim was to expand into the U.S. and increase its user base. The challenger bank has quite a number of reasons why it is rescinding its decision to apply for a U.S. banking license. According to the company, getting a U.S. license is part of its desires but as a result of circumstances that cannot be controlled, it has to withdraw its more than a year-long application. It “isn’t the outcome” that it planned to achieve, the company said.
“Following recent engagement with the OCC, we’ve decided to withdraw our banking license application for our U.S. start-up”, a spokesperson from the company said confirming the banking license withdrawal which was first reported by The Financial Times.
Shedding light on the decision, the spokesperson said that “while this isn’t the outcome we initially set out to achieve, this allows us to build and scale our early-stage product offer in the U.S. through existing partners and invest further in the U.K. We have big ambitions for Monzo U.S. There are many routes to market we’re exploring that have been successful for other market entrants who are now major players”.
Founded in 2015 by Tom Blomfield, Jonas Huckestein, Jason Bates, Paul Rippon and Gary Dolman, Monzo is a digital-only bank and operates without a physical location to provide its services. Its services are provided via its mobile app and transactions are completed with an ATM card.
While the fintech startup is one of those looking to leverage the opportunities that the financial world has to offer, the goes against competitors like N26, Chime, Revolut, etc. The company, after a series of setbacks, acquired its banking license in the U.K. in 2017.
The company has made significant progress and most of its U.K. users use the platform as their main bank account.
Acquiring a banking license in the U.S. would have given the opportunity to expand into the U.S. – provide banking products and services to people in the U.S., as well as increase its user base.
Monzo plans to focus on its operations in the U.K. and will offer products and services in the U.S. through partners.