Monzo withdraws US banking licence application

This is a significant blow:

It starts:

Monzo has withdrawn its application for a US banking licence after it was told by regulators it was unlikely to be approved, in a blow to the British fintech company’s international expansion plans.


A bit more detail here.

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Is comptroller the most American word ever? Don’t think I’ve ever heard it outside of American institutions


Hundreds of thousands of Brits use Monzo as their main bank account

It’s nearer a million isn’t it?


We do have them here.


I personally think its actually good news for crowdfunding investors. Look at Revolut what they are achieving without banking licenses in many countries. Its becoming a household name internationally. Banking license is nice to have but not at an expense of extremely slow progress. Monzo has been trialing its US beta with few thousand people for like what 2 years? Come on, its been extremely slow over there. Now that this plan is out of the window, maybe Monzo will just do the same what they did in the UK, get users first and then get the license in a few years if need be. If they first waited for a banking license in the UK, who knows if it was even around till today, because it’d lost out massively on market share to Revolut and Starling, etc.


Also its extremely risky to rely on one market for expansion, in this case, all eggs where kinda in one basket. And a basket which is the toughest to crack…

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No mention in the CNBC article of anything that suggests this is specific to Monzo, as compared to any other new entrant, so will be interesting to see how Revolut get on, as some sort of comparison


It did have the advantage - as Monzo stated originally - of not having to split them amongst multiple languages, which is overhead in both the app (i18n is hard) and also support.

The US regulators are by far the most demanding.


It’s apparently a 500-year-old mistake :sweat_smile:


The head of the National Audit Office is known as the Comptroller and Auditor General.

(Scroll down)

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No, the following are:


I’m not sure.

I’ve always had reservations about US expansion: language aside, banking culture and financial services are so very different. But so much effort has gone into this, for something that might well be a dead end. I’d like them to be able to do a Chime (which doesn’t have a banking licence either), but I’m sceptical (or skeptical for US readers).

My preferred expansion route was always Ireland (EU beachhead, same language, pretty similar banking culture, could practically reuse much of Monzo UK infrastructure…) then head into the EU. But I think it’s probably too late for that now.

Let’s see which way they play this, but in time this may well be seen to signify the end of Monzo’s international aspirations.


Totally agree with you here. Should have gone Ireland then any of Nordics, Spain, France, Germany… The US is super competitive and has some very odd practices like cheques… Whereas much of the infrastructure would work across Europe


Monzo said it was still committed to expanding in the US and would do so through its existing partnership with Ohio’s Sutton Bank, rather than as a standalone lender.

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I wonder if any of Monzo’s difficulties might be realised by Chase over here?

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Well, they’ve succeeded in obtaining a banking licence, so they’ve overcome that particular hurdle at least…


Hopefully Monzo quickens the pace of the US roll-out regardless of what route they taken. I think building up users and fit for their offering in the US market and then acquiring a bank for their license could be a route they go.

That’s definitely a possibility they could pursue; back in March, a locally-based challenger bank (SoFi) ended up buying a small retail bank in California which speeds up the licensing process by making it about a “change of control” (acquired bank’s license falling under the parent company’s control) rather than starting an entirely new bank. But, in the process it seems like they have to keep the physical branches open, and Monzo probably doesn’t have the appetite for that.

The above being said, aside from the fact that Monzo maybe should’ve started with a market closer to home, they’re here now, I imagine they don’t want their existing investment here to have been for nothing, and the lack of a bank license isn’t necessarily the first step to a full pull-out. Revolut, for instance, has stuck around despite still not managing to obtain a US banking license. Not sure how well they’re doing, but they’ve got a decent feature set, on par with a lot of other challenger banks in the US except checks. (In fact, I don’t think anyone at Revolut have even hinted that would be added in the future, so this may be as far as they want to develop their US product).


While I don’t know much about US banking regulation I doubt the regulator would allow Monzo to acquire a bank when not deemed fit to hold a charter on its own. But that can of course change down the line…

I wouldn’t be surprised if we see Monzo withdrawing form the US in the near future. It doesn’t seem significant resources have been spent localising the app, and the whatever’s been spent on the banking license is lost anyway. Without a banking license Monzo is only one of many with a very similar offering.

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