U.S. market expansion effort accelerates as Monzo appoints new CEO
In a bid to expand their horizons, European neobanks Bunq and Monzo are setting their sights on the United States. This move comes amidst tighter European regulations and increased competition, as these fintech companies strive to capture a share of the lucrative US banking landscape.
Amsterdam-based Bunq applied for a U.S. bank charter in April 2021, with the hopes of quick approval. The CEO of Bunq, Ali Niknam, stated that the process is expensive and time-consuming, but worth the effort. Niknam further emphasised that Bunq would rather do things right than rush and needs end-to-end control on the entire chain to deliver the desired user experience, which can be achieved by having its own bank.
Bunq's application for a US banking license in 2023 is part of its strategy to expand into the US market. However, no specific update on the current status or approval of the US bank charter is provided in the available information.
Meanwhile, London-based Monzo, another prominent neobank, also sought to enter the US market. Monzo withdrew its application for a U.S. banking charter with the Office of the Comptroller of the Currency in October 2021. The company does not have plans to make another bid for a U.S. charter, according to Sujata Bhatia, Monzo's Chief Operations Officer.
In a surprising turn of events, Conor Walsh, who previously served as the head of global product at payments fintech Cash App, has been named the new U.S. CEO of Monzo. Walsh expressed his admiration for Monzo and his excitement to expand the fintech's product and mission in the U.S. in a statement to AltFi. Walsh's appointment was announced at the Sifted Summit in London by Sujata Bhatia.
It's worth noting that Berlin-based N26 launched its app to a 100,000-customer waitlist in July 2019 but ultimately abandoned a 21⁄2-year stateside push to expand in the U.S. in November 2021. Another neobank, Revolut, launched in the U.S. in 2020. In March 2021, Revolut submitted a draft application for a banking license with the Federal Deposit Insurance Corp. and the California Department of Financial Protection and Innovation.
The US market presents a significant opportunity for European neobanks, but it also comes with stiff competition from traditional banks and other US-based challenger banks. European fintechs, including Monzo, face an uphill battle in capturing a significant share of the US banking landscape.
As these neobanks navigate the complexities of the US market, their success will depend on their ability to adapt to the unique regulatory environment, provide innovative products, and deliver a seamless user experience. The next few years promise to be an exciting time as these neobanks strive to make their mark in the US.
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