Applications to become the next Monzo or Revolut are falling under greater scrutiny, as regulators act on concerns about risk management.
The Prudential Regulation Authority (PRA) only approved four applications for banking licences in the 12 months to the end of February, down from 14 in the previous year. However the number of applications remained largely flat, dropping from 11 to 10.
The fall in approvals suggests that the PRA is taking longer to approve new applicants for banking licences than in the past, according to financial services consultancy Fscom.
“The PRA sees a lack of genuine banking experience as a stumbling block for an organisation looking to enter the banking sector,” director James Borley told City A.M..
“[It] operates with a presumption towards increasing competition in the banking sector, and is keen to see new banks enter the market. Potential applicants should be aware that none of the regulators challenges are insurmountable – the right preparation can ensure the process runs smoothly.”
It follows increased challenges in the sector, after digital bank Revolut was scrutinised by the Financial Conduct Authority over a series of incidents this year including the temporary suspension of one of its sanctions screenings systems.
High-street challenger Metro Bank also faced a probe after itRead More – Source