Wise is considering the possibility of becoming a fully licensed UK bank, marking a significant milestone in its development from a money transfer service to a broader financial services provider.
Continued Efforts for Banking Licence
The company has confirmed that it is still working towards securing a banking licence, contrary to earlier reports suggesting potential delays due to missing a key deadline (‘mobilisation’ phase).
Obtaining such a licence would enable Wise to offer regulated deposit accounts and direct access to the UK’s payments infrastructure, thereby reducing its reliance on third-party providers. This move could also position it more competitively against other digital banks like Starling and Monzo.
The Significance of Timing
The timing is critical given the rapid expansion of the UK neobank market, where 87% of adults use some form of online banking or remote banking services. This growth has attracted both domestic and international players seeking stronger footholds in the UK.
Strategic and Regulatory Considerations
During the mobilisation phase, Wise can operate with deposit restrictions while building necessary systems and meeting regulatory requirements. The company has reaffirmed its commitment to completing this licensing process within the next year.
Industry experts believe that a banking licence could offer several benefits for Wise. First, it would provide greater protection of customer funds under the Financial Services Compensation Scheme (FSCS), aligning with traditional bank standards. Second, it might reduce operational costs by directly accessing payment schemes such as Faster Payments and CHAPS. Lastly, it would allow Wise to expand its product range beyond international transfers and multi-currency accounts, potentially enhancing customer retention.
Implications for London’s Fintech Ecosystem
Wise’s push towards a UK banking licence follows the company’s recent announcement of a shift in its primary stock market listing from London to New York. This move was aimed at accessing deeper capital markets but raised concerns about the UK’s ability to retain high-growth fintechs. By pursuing this banking licence, Wise indicates that it remains committed to the British market despite its international investor base.
