Should a fintech company pursue a banking licence?

David Vélez · Sep 11, 2023

Fintech founders should embrace becoming a regulated bank rather than avoiding a banking license

Founders avoided licenses to protect valuation multiples, but that led to regulatory backlash because regulators saw businesses that looked like banks operating outside the perimeter; build the business first and worry about valuation later

Scope: contrasts Nubank's early choice with peers in developed economies

35:12 20VC: Lessons Building Nubank to the Largest Neobank in the World, How AI Changes The Future of Finance, Leadership Lessons from Sequoia's Doug Leone & What European and US Fintech Can Learn From LATAM with David Velez, Founder @ Nubank

Tom Blomfield · May 13, 2024 · hedged

Revolut will find it hard to change course on regulation because it has operated a certain way for so long, whereas Monzo's decision to intend to be a regulated bank from the very start is now paying off ten years later

48:41 20VC: Behind the Scenes at Y Combinator: The Interview Process | What the Best & Worst Do in the Program | Do the Best All Raise Pre-Demo Day & YC's Fundraising Advice to Startups | Why the Value is in Application Layer AI with Tom Blomfield

Martin Mignot · Aug 11, 2025

If starting again, Nik Storonsky would pursue a banking licence earlier rather than seeing its absence as an advantage

It is much easier to obtain a banking licence before you have scale than after

Scope: Martin has heard him say this a couple of times

54:26 20VC: Figma, Scale, Wiz: Inside Index's Decacorn Factory | Decision-Making, Investment Process, Biggest Lessons, Biggest Misses | Why Gross Margin is a Fallacy at Seed | Never Turn Down a Deal on Price with Martin Mignot, Partner @ Index Ventures

Harry Stebbings · Jul 14, 2025

Not holding a banking licence has been Revolut's advantage, enabling a product velocity Monzo could not match because of its regulatory provisions

Monzo's licence carried regulatory obligations that slowed its shipping speed

38:34 20VC: Vlad Tenev on Robinhood's $85BN Resurgence | Tokenizing SpaceX & OpenAI | Building Nine Revenue Lines Over $100M | Why Crypto Will Be Robinhood's Biggest Revenue Line | Why Stablecoins Will Replace Banking Rails

Harry Stebbings · Aug 11, 2025

Had Revolut obtained a banking licence early, it would have been prohibited from most of its product expansions

54:50 20VC: Figma, Scale, Wiz: Inside Index's Decacorn Factory | Decision-Making, Investment Process, Biggest Lessons, Biggest Misses | Why Gross Margin is a Fallacy at Seed | Never Turn Down a Deal on Price with Martin Mignot, Partner @ Index Ventures

Vlad Tenev · Jul 14, 2025 · hedged

Pursuing a banking licence is jurisdiction-dependent and in the US has traditionally been too onerous to be obviously worth it

A US banking licence means regulators sit in your board meetings approving new products; Revolut has done fine in the UK without one

38:15 Us licence is too onerous to be worth it

Vlad Tenev · Jul 14, 2025

Holding a banking licence carries a real countervailing advantage: you can call yourself a bank, and some customers genuinely care about that

38:43 Licence lets you call yourself a bank a real advantage

Antoine Le Nel · Oct 18, 2024

Holding banking licenses will not slow Revolut down

Revolut already operates under different banking licenses around the world, including in Mexico, and it is business as usual

53:37 Banking licenses do not slow a fintech down

David Vélez · Sep 11, 2023

If you want to be a customer's primary bank account you must obtain your own banking license rather than rely on a banking partner, and that choice necessarily makes the business less internationalizable, forcing a go-deep-in-few-markets strategy

A banking license localizes the business, which is why Nubank has entered only three countries in ten years while pursuing the position of largest financial institution in each

20:11 Primary account status requires a banking license limiting internationalization