Digital Challenger Banks encounter challenges

On Oct 5, Monzo announced that it will abandon its bid to acquire a US banking licence following a two-year discourse with regulatory authorities. In a statement, the bank says: “Following recent engagement with the OCC (Office of the Comptroller of the Currency), we’ve decided to withdraw our banking license application for our US start-up. While this isn’t the outcome we initially set out to achieve, this allows us to build and scale our early-stage product offer in the US through existing partners and invest further in the UK.”

In July this year, Monzo issued another warning about its ability to continue as a going concern after reporting a £115 million loss for 2020/21. it also revealed that it is under investigation by the Financial Conduct Authority over its compliance with money laundering rules. Monzo is one of the earliest digital-only banks in the UK.