Fiinu, which offers short-term credit to consumers via an arranged overdraft, in April said its subsidiary Fiinu 2 was struggling to raise capital to meet the requirements for exiting the mobilisation period and moving to a full banking licence. Initially, the aim was to re-apply after a short period of two to three months once exit funding had been secured.

In a statement, the company now says: "Due to the continuing challenging market conditions and limited timescale, it has not yet been able to secure the necessary exit funding to consider seeking re-application."

In a last-ditch bid to meet the requirements, Fiinu has embarked on a cost reduction programme, terminating staff and renegotiating agreements with technology suppliers, including open banking provider TransUnion and core banking supplier Tuum.

The company states: "Whilst Fiinu 2 Limited proceeds with the controlled scaling back of its operations, which may take a number of months, the Company will continue to review all its options in respect of the business, including trying to source the additional funding required for it to re-apply to the regulators to re-start its banking licence application, but also other options, which may include a change of strategy and/or a sale of the Group's technology assets."

The firm currently has available unaudited cash resources of approximately £4.3m. It says this represents enough funds to scale back its current operations in Fiinu 2 Limited and Fiinu Holdings Limited and to meet its financial obligations as they fall due.

Chris Sweeney, CEO of Fiinu, says: "It is with deep regret that we have had to scale back operations in Fiinu 2 Limited and Fiinu Holdings Limited, following the successful completion of the technology build of the Plugin Overdraft. The current general capital, and market specific conditions, are increasingly challenging for a business at Fiinu's current stage of development"

Shares in Fiinu nosedived on the news, plunging by 67%.