- Fiinu was granted the second fintech banking license by the UK
- Fiinu will soon make its plug-in for overdraft available to the market once it is officially approved. This will help customers cope with rising living costs.
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The latest: The UK has granted Fiinu, a Fintech company, a banking license. This is the second such license that it has given out to a fintech in recent months. However, the future of UK fintech is now uncertain due to an administrative shakeup.
Fiinu receives a license: Fiinu, a UK-based fintech, will offer customers overdrafts via a plug-in feature that allows them to access their bank accounts or overdrafts from any of their current accounts.
This feature will be made available via Open Banking and will work alongside existing customer bank accounts.
Fiinu’s approach to overdrafts is unique because it uses a unique underwriting model that allows it to offer overdraft features for customers who might not otherwise be able.
Fiinu has been working for five years with the Financial Conduct Authority and Prudential Regulatory Authority to get its banking license. Fiinu will soon be able to offer its overdraft plug in to the market to help customers cope with rising living costs once it is officially approved.
Fiinu was also granted a banking license. Fiinu Plc will be the new name of the company.
The company is listed on the London Stock Exchange (LSE), and its value is currently at PS53 million ($72.9 Million).
UK Banking License Rollout: It is not easy to obtain a UK banking license. The government requires that financial institutions (FIs), demonstrate that they have strong systems and that they use strict compliance and risk management processes. It is also critical for FIs to offer crypto-related products.
After applying for a UK bank license more than a year ago, Revolut is still fighting. Regulators worry that the neobank’s cryptocurrency transactions could make it vulnerable to fraud and money laundering.
However, Fiinu’s bank license is only the second issued by the UK government in the last month.
Digital bank Kroo received a license late last month based on an app it started in July 2020.
Future fintech uncertainty: The UK has placed financial technology at the forefront of its efforts to be a global fintech leader. Fiinu listed on the LSE because it appreciated the UK’s support for fintech. However, the future for UK fintech is in doubt with Boris Johnson as Prime Minister. A few major initiatives are underway at the FCA.
Open banking regulation: The UK continues to refine open banking. This includes replacing the Open Banking Implementation Entity, (OBIE), with a new regulatory and getting feedback from stakeholders.
Crypto regulation: In April this year Economic Secretary to Treasury John Glen declared that the UK would also be a crypto powerhouse. He said the UK would allow companies to use digital currencies in a controlled environment to create new products. The country also pledged to be a hub of digital assets.
The main takeaway is that the UK has done a lot to reach its current advanced technological status. To jump on the innovation, banks are keen to get a UK banking licence. UK regulators seem to be ready to promote stablecoins as well as other digital currencies. However, the current political turmoil in the country could cause delays or even cancel plans for the fintech sector.
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