Monzo Looks For US Banking License

Monzo is preparing a renewed push to secure a US banking licence, four years after abandoning its first attempt when talks with regulators stalled. The UK neobank is exploring whether market conditions under President Donald Trump’s deregulatory agenda could create a more favourable environment for approval, according to people familiar with its plans.

Senior executives at the bank believe a fresh application to the Office of the Comptroller of the Currency now stands a better chance of success. The OCC, along with the Federal Deposit Insurance Corporation, has rolled back guidance that previously made it harder for non-traditional financial groups to complete banking deals. Those developments have encouraged several international fintechs to revisit long-term expansion plans in the world’s largest retail banking market.

Monzo’s renewed interest comes as digital lenders look beyond their home markets for growth. The US offers a vast pool of potential customers and the opportunity to gather meaningful deposits at a time when competition in the UK fintech sector has intensified. Several British challengers, including Revolut and Starling, have examined routes to enter the US by purchasing an existing American bank that would allow them to lend nationwide.

The company first sought a US banking licence in 2020 but withdrew the application the following year after receiving guidance from the OCC that approval was unlikely. At the time, Monzo was recovering from a sharp fall in its valuation following the pandemic and was the subject of an investigation into potential breaches of anti-money laundering rules. The bank’s leadership took the decision to step back from the US and concentrate on stabilising operations in the UK.

That strategy has delivered results. In the year to March, Monzo increased revenues by forty-eight per cent to one point two billion pounds and reported pre-tax profits of sixty point five million pounds, almost four times the figure posted in the previous financial year. The bank now has thirteen million customers worldwide and continues to gain market share in the UK as it expands into savings products, investments and lending.

Despite those gains, the limitations of operating in the US without a banking charter have become more apparent. Monzo currently serves American customers through partner banks, a model that restricts product development and inhibits the level of customer engagement needed to scale meaningfully. Executives believe a national licence would open up the ability to build a full-service US offering and compete on more equal terms with domestic digital banks and established lenders.

The deregulatory momentum under Trump has caught the attention of other international fintech groups as well. Checkout.com, headquartered in London, announced last week that it intends to intensify its US expansion after being granted a limited purpose bank charter by the state of Georgia. The charter allows the payments group to settle transactions directly for merchants, improving its competitiveness in the world’s most lucrative payments market.

Nubank, the Brazilian digital lender that has grown to become one of Latin America’s biggest financial institutions, has also filed an application for a US national bank charter. The move forms part of an effort to broaden its global footprint and access more stable funding sources.

For Monzo, the US represents both an opportunity and a test. A successful application would allow the bank to enter a market that remains highly fragmented and ripe for digital disruption. But the path to approval is likely to be rigorous, even under a more relaxed regulatory environment. Banking licences in the US require strict demonstration of capital strength, risk management capacity and compliance systems capable of supporting multi-state operations.

Industry analysts note that Monzo’s previous difficulties with regulators could attract scrutiny, although the bank has made significant investments in compliance since 2021. The improvement in profitability and revenue growth may also strengthen its case. Several investors say the bank has reached a stage of maturity that supports international expansion, provided it maintains the financial discipline shown over the past two years.

The broader political context adds another layer of complexity. Trump has signalled an intention to reduce regulatory burdens and encourage financial innovation. Supporters argue that this could lower barriers for digital-first banks seeking to enter the US market. Critics counter that the deregulatory messaging may not translate into uniform policy changes across agencies, particularly if different regulators take divergent approaches to new entrants.

Monzo declined to comment on its plans. People close to the company emphasise that discussions remain exploratory and that a formal application has not yet been submitted. They add that the bank intends to assess the regulatory landscape carefully before making any decision.

Whether or not Monzo proceeds, the renewed interest from international fintechs reflects shifting expectations about the US regulatory climate and the search for scale as digital banking matures. The coming year is likely to show whether more lenient policy signals will translate into tangible opportunities for overseas challengers hoping to secure a foothold in the American market.