London-based startup Griffin has become the latest fintech to secure a banking licence, albeit with restrictions, after receiving the regulatory nod from the Financial Conduct Authority (FCA).
Griffin applied for a UK banking licence last year, which it announced alongside its £12.5m funding round in July.
Despite reaching the regulatory milestone, Griffin faces some restrictions over the services it can offer. It can only hold a limited amount of deposits and carry out a limited amount of payment services while in restricted authorisation, referred to as mobilisation.
According to the FCA, financial firms are put in mobilisation “due to some areas needing further work”. The period is capped at one year, after which the licence is withdrawn if the bank has not made sufficient changes.
Griffin provides tools for financial companies, including customer onboarding checks and payments. A full banking licence lets firms engage in full banking activities, such as holding customer funds and asset management.
During this period of mobilisation, Griffin will make developments to its systems and controls, grow its team size, and expand its product offerings. It is up to the discretion of the FCA and the Prudential Regulatory Authority (PRA) as to when Griffin can move on from mobilisation to unrestricted authorisation.
It took 10 months to go from application to mobilisation. Fintech company Revolut, which recently published its full-year results, has been waiting more than two years for regulatory approval of its own banking licence.
“This moment has been years in the making,” said Griffin co-founder and CEO David Jarvis.
“Becoming a bank is testament to the determination of our team, who have been tirelessly building a modern core banking system, a resilient operational backbone and a robust compliance framework.”
John Weguelin, chair of the board at Griffin added: “We are honoured to receive authorisation in the UK and grateful to the partners and customers that have supported us along the way.
“The team will continue to work closely with the regulators in building an API-first bank while delivering a best-in-class customer experience.”