- London-based fintech Griffin has filed an application for a banking license with UK authorities.
- The banking-as-a-service startup aims to provide APIs to other fintechs that need banking products.
- Only 28% of companies that have consulted with UK banking regulators have reached the application stage.
Banking-as-a-service fintech Griffin submitted an application for a banking license to UK authorities after years of process.
Founded in 2017 by former Airbnb software engineer David Jarvis and CircleCI founder Allen Rohner, the London-based startup seeks to serve as a one-stop shop for new banking services by providing APIs to fintechs and other financial institutions. products on the market.
Griffin’s API aims to enable businesses to open perimeter accounts with a tighter and less documented compliance structure. Simply put, Griffin will help businesses get their products to market right away, eliminating the need to find a banking partner and skipping slow and costly processes.
However, the process of applying for a bank license requires companies to prepare for effective governance, implement a viable and sustainable business model, adequate capital and
Safe and secure infrastructure and operations.
Between 2013 and 2019, only 28% of companies meeting with the UK’s two major financial regulators, the Prudential Regulatory Authority (PRA) and the Financial Supervisory Authority (FCA), reached the submission stage. According to data from the Bank of England.
“The majority of UK fintech companies are not banks, but can be regulated, but tend to be less regulated than banks,” Jarvis told Insider. “E-money institutions cannot pay interest on their deposits and do not have the same unit economy for their loans. Being a bank was not important before, but now inflation is high and still rising is important in a meaningful way. ”
For Griffin, this is an opportunity to provide embedded financial solutions to other companies as well. It is a fast-growing market estimated to be worth around $7.2 trillion by 2030. Built-in finance allows non-financial services companies to provide banking services beyond online payments such as bank accounts, wallets, or loans.
“You don’t have to be a bank to provide an embedded finance solution, but it helps,” added Jarvis.
“We are going to be a full-stack product that encompasses not just banks, but these embedded options and more core banking infrastructure. The range of banking partner options currently available, such as payment companies, is limited. This is an ecosystem that has been idle for 15 years. But now things are changing with inflation and higher interest rates.”
Ultimately, being in a position to file a license doesn’t guarantee successful support, but Jarvis told Insider he was optimistic about the company’s prospects.
To date, Griffin has raised $12.7 million in venture capital from funds including EQT Ventures and Seedcamp.
“Banks today aren’t ready to support the seamless, contextual experiences consumers expect,” said Tom Mendoza, EQT Ventures Partner.
“There is a gap in the market today for technology and a developer-led, full-stack approach to banking. Griffin represents the future when it comes to powering the next generation of fintech and embedded finance.”