The British Fintech company Fiinu wins a banking license

The news: The UK has given fintech firm Fiinu a banking license – the second license it has issued in recent months to a fintech. But an administrative shake-up means that the future of fintech in the UK suddenly looks uncertain.

Fiinu gets a license: Fiinu is a British-based fintech that is set to offer a first of its kind plug-in overdraft function, which gives customers access to overdraft without having to change bank or checking account.

The feature will be available via

open bank

and will sit next to customers’ existing bank accounts.

Fiinu approaches overdraft through a unique insurance model, which allows it to bring overdraft features to customers who would not normally have access to them.

Fiinu has worked with the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) for five years to obtain the banking license. When it’s official, Fiinu plans to bring its overdraft plug-in to market quickly to help customers with the rising cost of living.

In addition to the banking license, Fiinu underwent a reverse takeover of Immediate Acquisition Plc. The new company will be named Fiinu Plc.

The company is now listed on the London Stock Exchange (LSE) and is valued at 53 million pounds (72.9 million dollars).

Rolling out a banking license in the UK: It is not easy to get a banking license in the UK. The government requires financial institutions (FIs) to demonstrate that they have robust systems and that they use strict compliance and risk management processes. It is also very critical for FIs who want to offer crypto-related products.

Revolut is still fighting for a British banking license, after applying more than a year ago. Regulators are concerned that the neobank’s trading in cryptocurrency could make it vulnerable to fraud and anti-money laundering.

But Fiinus’ banking license is the second the British government has issued in the past month.

Late last month, the digital bank Kroo received the license based on an application it started in July 2020.

Future fintech uncertainty: The UK has prioritized financial technology in an effort to become a global fintech power plant. That’s why Fiinu chose to list on LSE: The company applauded the UK’s support for fintech. But Prime Minister Boris Johnson’s planned departure puts the future of British fintech in doubt. A few major initiatives are underway at the FCA:

Open banking regulation: The UK continues to refine open banking activities, including replacing the Open Banking Implementation Entity (OBIE) with a new regulator and obtaining feedback from stakeholders.

Cryptoregulation: Earlier this year, Finance Minister John Glen promised that the UK would also become a cryptocurrency center and said it would allow companies to innovate using digital currencies in a sandbox environment. The country has also promised to become a hub for digital assets.

The big takeaway: The UK has put a lot of work into getting to its current, state-of-the-art technological state. Banks are eager to get a UK banking license to take part in the innovation, and UK regulators seem ready to market stable coins and other digital currencies. But the political unrest that is now unfolding in the country can lead to delays and shelved plans in the fintech sector.

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