QED Investors, a leading global fintech venture capital firm, and Oliver Wyman, a global leader in management consulting and a business of Marsh McLennan, today announced a new report titled, Seizing the bank charter moment: Implications for fintechs and banks.
Informed by expert insight, secondary research, proprietary analysis, and conversations with over a dozen C-suite executives at leading fintechs, QED Investors and Oliver Wyman examine key considerations, challenges, and opportunities for fintechs and nonbanks in the pursuit of a charter.
Bank charters have emerged as a top-of-mind consideration for fintech C-suite executives. The report serves as a primer on the bank charter journey and comes out on the heels of 20 applications filed this year for charters or bank acquisitions by fintechs, digital-native banks, or nonbanks, representing an all-time high.
The fintechs and nontraditional entities considering charter pursuits include global neobanks, online lenders, digital asset and crypto fintechs, online brokerage firms and robo-advisors, B2B payments providers, payment processors, money transfer providers and captive lenders.
But what is driving this trend? According to the report, the recent urgency is driven by:
- Maturation of scaled fintechs increasing their suitability for a bank operating model
- An emerging window for charter approvals due to shifting political and regulatory winds
- Concern about long-term risks to the sponsor bank model beyond the current administration
The joint report addresses:
- The appeal of the bank charter and the drivers behind the 2025 uptick in charter pursuits
- An assessment of which types of fintechs should pursue charters and an exploration of the economic trade-offs that come with bank status
- Detailed hypotheses on how the current wave of charters will alter the future competitive landscape
- Calls to action for different stakeholders in the ecosystem
In addition, the QED Investors Oliver Wyman report provides recommendations on best practices for successful charter pursuits, considerations for whether a fintech should apply de novo or acquire an existing bank, analysis of the valuation implications of a charter, potential impacts to the banking-as-a-service model and sponsor banks and possible scenarios for stablecoin and digital assets.
“The current macro and regulatory environments have created a unique window for a specific category of fintechs to secure a bank charter,” said QED Investors Managing Partner Nigel Morris.
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