UK challenger bank Monzo has applied for a US banking licence so it can offer a full suite of services in the world’s biggest financial market.
The fintech firm, known for its pink “hot coral” cards and sleek app, applied to the US authorities for a licence on Monday in the most important step in its stateside expansion.
Monzo’s US chief executive TS Anil said the firm was “applying to be one of the first new US banks in a decade” in a “significant milestone”.
However, it could take Monzo between 18 months and two years to have their application approved. The process, run by the US Office of the Comptroller of the Currency, is more stringent than other countries’ such as the UK.
Monzo has 4m customers in the UK but has recently set its sights on a US expansion. It appointed Anil at the start of the year, and will be opening a San Francisco office. It already has offices in Los Angeles.
Becoming a fully licensed bank would let Monzo provide a wide range of lending products and fully insured deposit accounts. The rewards are potentially huge given the population of the US and its wealth.
Monzo has operated as a fully licensed bank in the UK for three years. This has let it pivot towards traditional – and, crucially, money-making – banking practices such as lending.
The firm is hopeful that its application will be approved, but US authorities have slowed the flow of licences in recent years.
Success in its bid would also give it a leg-up against competitors such as Revolut, which has so far not applied for a US banking licence.
Anil said: “Filing an application for a US banking licence is a significant milestone in our mission to make money work for everyone.”
“By applying to be one of the first new US banks in a decade, we’re aiming to provide Americans with a better banking alternative.”
“Monzo will be fair, transparent, and will bring many of the features that our UK customers love to the US market.”