Up to now, the most successful fintech firms have tried to fill gaps in underserved market, not replace banks. But a new crop of U.K. startups seeking bank charters is turning up the heat.
Varo Money, an app designed for people who want to bank exclusively on their cellphones, announced Tuesday that it has filed formal applications for a national bank charter.
In recent years, the country’s largest cellphone carriers have begun to experiment with new financing options for smartphones and other devices. That forebodes a deeper interest in financial products.
A handful of underfinanced startups aren’t enough to sink the industry. Community banks will survive digital disruption so long as they concentrate on what their customers want and need.
Auto risks mounting. Mortgage market tightening. Are there any good risks these days in consumer lending? Regional bank executives insist partnerships with online lenders, unsecured personal loans and other niche efforts can work if done properly.
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The marketplace lender's application for an industrial bank charter is under fire from small banks and progressives, who say it could violate the barrier between banking and commerce and shut out middle-class and lower-income consumers.
