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Banking License · Fintech Regulation · Monzo · US Expansion
Monzo, a UK digital bank, withdrew its application for a US banking license after the Office of the Comptroller of the Currency (OCC) indicated it would not approve the bid, forcing the company to pursue US expansion through existing partnerships instead of as a standalone lender.
The bank initially applied for the US license in April 2020, but US regulators maintain a tougher stance on approvals compared to UK watchdogs. This decision follows a challenging period for Monzo, which included staff layoffs, a reduced valuation in a funding round, and a 13% increase in losses to £130 million last year.
The company also faces an investigation by the UK’s Financial Conduct Authority into anti-money laundering control lapses. Despite these setbacks, Monzo states its commitment to US expansion through its existing partnership with Ohio’s Sutton Bank.
The company is launching new products, such as buy now, pay later features and paid accounts, to achieve profitability, reporting that revenues have recovered in recent months. Rival digital bank Revolut is also pursuing a US banking license.
