Fintech company Revolut has decided to terminate its plan to merge with an existing US bank and instead pursue obtaining a standalone banking license. The company believes that securing a new banking license under US regulatory authorities will be faster and simpler than acquiring an existing bank, eliminating the need to establish physical branches. Revolut, known globally for its digital banking and financial services, aims to provide customers with accessible and cost-effective banking solutions. Initially considering a merger to enter the US market, Revolut now plans to establish a “de novo” bank, which means receiving approval as a completely new banking institution rather than purchasing an existing one.
This shift comes amid stringent regulations in the US banking system, where setting up and managing physical branches is costly and complex. Revolut intends to introduce a modern, fully digital banking model that offers online services without geographic limitations, facilitating quicker market entry and broader customer reach. While this move is likely to increase competition in the US fintech sector, especially among companies expanding through digital banking, Revolut may face legal and administrative challenges in obtaining the new license and commencing operations. Nonetheless, the strategy represents a potentially innovative and flexible approach within the fintech industry.
Source: coindesk
