Monzo applies for a banking licence with the US Office of the Comptroller of the Currency

The race among UK challenger banks to establish themselves across the pond has got fiercer after Monzo applied for a US banking licence.

The application sent to the US Office of the Comptroller of the Currency marks a serious effort for the neobank to launch its services in the country.

To back up its US aspirations, the FinTech venture is also planning on hiring more people to its San Francisco office.

It’s easy to see why Monzo would make the effort to apply for a licence. Not only would the licence enable the bank to offer fully insured deposits accounts and to lend money in the US, it would also empower it to compete directly for the digital banking market across the US.

Although, getting a banking licence in the US is a complex and time-consuming process that could take up to two years.

For instance, rival Varo Money may have received preliminary approval for a national banking chapter in 2018 but has not yet secured a full licence and stock-trading app Robinhood withdrew its application in November 2019.

Monzo is already operating a limited test of its banking app in the US in partnership with Ohio-based Sutton Bank.

Revolut launched its app in the US in March through a similar deal with New York-based Metropolitan Commercial Bank. However, it has yet not applied for a banking licence in the US.

The news comes as challenger banks around the world continues to go from strength to strength, with seven of the ten biggest WealthTech investment deals in the first quarter of 2020 being raised by neobanks, according to FinTech Global’s research. If you are looking to learn more about the competition Monzo and Revolut are facing, check out our list of ten challenger banks you really should know about right now.

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