Cashplus said yesterday it will soon apply for a UK banking licence as part of the British fintech firm’s plan to step up its challenge to traditional banks.
Having a banking licence offers holders advantages including the ability to lend out deposits to businesses, but it also carries the burden of greater regulatory scrutiny.
The move will allow Cashplus to convert the £200 million of customers’ funds it holds into bank deposits, its chief executive Richard Wagner told Reuters.
“We have a proven track record and six years’ of profitability, and this change will help us provide more services to customers overlooked by traditional banks.”
Formerly Advanced Payments Solutions, Cashplus was founded 12 years ago as one of the first rivals to traditional banks to come from the growing fintech sector.
Newer banks with branches such as Metro Bank and app-only smartphone rivals like Monzo and Starling Bank, are chasing market share from incumbents like Lloyds and Barclays by offering slicker digital services.
Cashplus is already profitable, mainly because it levies a charge on current accounts rather than providing them for free.
Wagner said Cashplus has already been in conversation with Britain’s banking regulators and aims to formally file its licence application in January.
The process can then take around a year, he said.