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Monzo abandons plan to acquire US banking licence

Monzo abandons plan to acquire US banking licence

Monzo has been forced to abandon its bid to acquire a US banking licence following a fruitless two-year discourse with regulatory authorities.

In a statement, the bank says: “Following recent engagement with the OCC (Office of the Comptroller of the Currency), we’ve decided to withdraw our banking license application for our US start-up. 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 US through existing partners and invest further in the UK.”

The news was first reported by the Financial Times, which said that Monzo bailed after it became clear the OCC would not support the loss-making bank’s bid.

Monzo in July issued another warning about its ability to continue as a going concern after reporting a £115 million loss for 2020/21. it also revealed that it is under investigation by the Financial Conduct Authority over its compliance with money laundering rules.

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.

“We have big ambitions for Monzo US,” a spokesperson says. “There are many routes to market we’re exploring that have been successful for other market entrants who are now major players.”

Comments: (3)

Andrew Smith
Andrew Smith - RTGS & ClearBank - London 04 October, 2021, 18:53Be the first to give this comment the thumbs up 0 likes

This is sad news, but isn't a massive surprise...

This could be a good opportunity for Monzo to re-evaluate some of its operational models, consolidate and focus its proposition a little more - and then really press on with that expansion plan...It's a fab vision, fab product and the banking sector needs Monzo

David Gyori
David Gyori - BANKING REPORTS, LONDON - London 05 October, 2021, 09:15Be the first to give this comment the thumbs up 0 likes

1. Building a bank is expensive. 
2. Simplicity and focus help to limit costs (everything unchanged).
3. We can look at Starling Bank vs Monzo and see the difference in terms of focus and simplicity. 
4. This strategic difference is mirrored back to us when we compare the P&L statement of the two entities.
5. I respect both entities: Starling as well as Monzo.


Andrew Smith
Andrew Smith - RTGS & ClearBank - London 05 October, 2021, 10:431 like 1 like

@David I think Starling is a more complex business than Monzo. Monzo needs to simplify its operations IMHO but expand its offering. It needs to be more aligned to delivering actual banking services if it is to be a full bank.