LONDON – UK-based fintech company Monzo has withdrawn its US banking license application after discussions with the regulator’s Office of the Comptroller.
The London-based mobile banking app said it was “not the result” it was initially trying to achieve.
The news was first reported by the Financial Times on Monday and confirmed to CNBC by a Monzo spokesperson.
Monzo reportedly began applying for a US banking license in April last year as part of expanding its user base, but talks with the OCC appear to be failing.
“Following our recent contract with OCC, we have decided to withdraw our banking license application for US start-ups,” a Monzo spokesperson said in a statement.
“This is not a result of what we previously tried to achieve, but it allows us to build and expand our early-stage product offerings in the United States through our existing partners and to invest more in the United Kingdom.” Allows. There are big ambitions. The market path we are investigating is successful for other market entrants that are currently major players.”
Launched in the United States in June last year without a full bank license, Monzo is one of the so-called challenger banks that work exclusively with ATM cards and apps. These are the new digital banks looking to grab a share of the larger financial services sector.
Competing with Chime, UK’s Revolt, Germany’s N26 and others, the start-up was able to obtain a full banking license in the UK in 2017 to offer more revenue-generating products to its customers.
Millions of Britons use Monzo as their main bank account, but the company has yet to turn a profit. Losses for the year in February stood at £130m ($181.68m), up from £114m the previous year.
Last June, Monzo said the turmoil caused by COVID-19 raised “grave doubts” about its potential to continue “as a concern”.
The company also slashed its market value by 40% to £1.25 billion. (((($1.7 billion at the same time).