Although digital banks and fintech companies worldwide work tirelessly to disrupt traditional banks, they also rely on them to provide them with essential banking services. It really is a catch 22 as without established banks, fintech companies and digital banks basically aren’t allowed to provide any financial services to their customers.
They, therefore, have to partner with big banks if they don’t apply for a banking license of their own. Acquiring a banking license is a long and costly process with no guarantees. It’s much easier to partner with an existing bank or even merge with one to continue their digital banking business model.
There are several banks and financial institutions that you’ll be seeing throughout our list. You might say that they specialize in partnering with up-and-coming digital banks and other fintech companies whose names you might recognize.
In Europe, a fintech company doesn’t have to have a banking license or partner with an existing bank to offer financial services. They can be registered as electronic money institutions authorized by UK’s Financial Conduct Authority if they want to do business in the UK.
If they’re going to do business in EU countries, they can seek authorization by just one country’s national bank to do business EU-wide.
Popular banking partners
When you think of a bank, you think of a brick-and-mortar institution with a physical branch on every major street. That physical presence is why big banks remain household names.
Yet, the US has more than 4,500 FDIC-Member institutions. Many of them flourish even without physical branches. They thrive in the online space.
Because fintech companies in the United States don’t have banking licenses of their own, they have to partner with these long-established financial institutions that provide them with back-end banking services and issue debit and credit cards for them.
Lincoln Savings Bank partners with several fintech companies:
- Cash App
- Qapital
- Acorns
- M1
Evolve Bank & Trust is a financial institution founded in 1925 and now offers services in banking, payment processing, mortgage, trust, and SBA lending to several other fintech companies:
- Branch
- Mercury
- YieldStreet
- Zero
- Rho Business Banking
- OnJuno
The Bancorp Bank provides back-end banking services and card issuing to half a dozen fintech companies:
- Varo Money
- SoFi
- Oxygen
- Chime
- Current
- Tab Card
- Netspend
- Venmo
- Uber
- BlueVine
Coastal Community Bank has partnered with:
- One Financial
- Aspiration
Metropolitan Commercial Bank is a full-service commercial bank from NYC that has partnered with the following fintech firms:
- Revolut
- MoneyGram
- Current
Sutton Bank is an independent community bank from Ohio that has partnered with the following fintech companies:
- Robinhood
- Monzo
- Brex
- Upgrade
- Marqeta
- Ramp
- TeamPay
What bank is Ally with?
Ally Bank was first formed as GMAC Bank in 2000, and in 2009, it was rebranded as Ally Bank. It’s part of Ally Financial – a bank holding company. Ally has had a banking license for a long time and therefore doesn’t have to partner with other banks to offer financial services.
- Founded: 2000 (as GMAC)
- CEO: Jeffrey J. Brown
- Parent institution: Ally Financial
What bank is Axos with?
Axos Bank was formerly known as the Bank of Internet USA and was formed in 1999 by Jerry Englert and Gary Lewis Evans. Its parent company is Axos Financial, Inc. (AX). They are a federally chartered direct bank and offer all their financial services on their own.
- Founded: 2000
- Founders: Jerry Englert, Gary Lewis Evans
- CEO: Gregory Garrabrants
- Parent institution: Axos Financial
What bank is Chime with?
Chime was established in 2013 by Chris Britt and Ryan King and are a fintech company without their own banking license. They provide banking services through their partner banks, The Bancorp Bank or Stride Bank, N.A., Members FDIC.
- Founded: 2013
- Founders: Chris Britt (CEO) and Ryan King (CTO)
- Partner bank: The Bancorp Bank or Stride Bank
What bank is Cash App with?
Cash App is a financial services company that was set up in 2013 as Square Cash. It’s not a proper bank and has to offer all its financial services through its partner bank Lincoln Savings Bank. The bank also partners with Qapital, MoneyLion, and Acorns.
- Founded: 2013
- Founders: Jack Dorsey and Jim McKelvey
- Partner bank: Lincoln Savings Bank
What bank is Cogni with?
Cogni was formed in 2018 by Archie Ravishankar and has headquarters in New York. It’s a financial technology company and doesn’t have a banking license. That’s why they partner with Community Federal Savings Bank, a member FDIC, to provide their Visa card and other financial services.
- Founded: 2018
- Founder: Archie Ravishankar (CEO)
- Partner bank: Community Federal Savings Bank
What bank is Current with?
Current was founded in 2015 by Stuart Sopp. It’s a privately held fintech that doesn’t hold a banking license and isn’t a bank in any shape or form. They used to partner with two banks – Choice Financial Group and Metropolitan Commercial Bank to provide their financial services and products.
But, in 2021, the company decided to partner with The Bancorp Bank. Choice Financial Group and Metropolitan Commercial Bank will still service existing customers.
- Founded: 2015
- Founder: Stuart Sopp (CEO)
- New Partner bank: The Bancorp Bank
- Old partner banks: Choice Financial Group and Metropolitan Commercial Bank
What bank is lili with?
lili was founded in 2018 by Lilac Bar David (CEO) and Liran Zelkha. The company has headquarters in New York. It’s also a financial technology company and not a bank. They don’t have a banking license in the US or elsewhere and, therefore, partner with Bank of Choice Financial Group Inc. Member FDIC to provide banking services.
- Founded: 2018
- Founders: Lilac Bar David (CEO), Liran Zelkha
- Partner bank: Bank of Choice Financial Group Inc.
What bank is Majority with?
Majority was founded in 2019 by Johan Dahlqvist, Johan Granlund, and Magnus Larsson. It’s a privately held company headquartered in Houston, Texas. It’s a financial services company that doesn’t hold a banking license and has to partner with Sutton Bank to provide banking and financial services to their customers.
- Founded: 2019
- Founders: Johan Dahlqvist, Johan Granlund, Magnus Larsson (CEO)
- Partner bank: Sutton Bank
What bank is Mercury with?
Mercury was founded in 2017 by Immad Akhund (CEO), Jason Zhang, and Max Tagher. It’s a privately held company headquartered in San Francisco that doesn’t hold a banking license and is therefore not a bank. To provide banking services to their customers, the company partners with Evolve Bank & Trust, Member FDIC.
- Founded: 2017
- Founders: Immad Akhund (CEO), Jason Zhang, Max Tagher
- Partner bank: Evolve Bank & Trust
What bank is Monese with?
Monese was founded in 2013 by Norris Koppel. It doesn’t have a banking license and is regulated as an e-money institution authorized by the Financial Conduct Authority in the UK and by the National Bank of Belgium to issue electronic money and payment services.
- Founded: 2013
- Founder: Norris Koppel (CEO)
- E-money institution in the UK and the EEA
What bank is MoneyLion with?
MoneyLion was founded in 2013 by Chee Mun Foong, Diwakar Choubey, and Pratyush Tiwari. It’s a financial technology company and not a bank. To offer financial services to their customers, MoneyLion partnered with Lincoln Savings Bank first, only to move over to MetaBank, a federally chartered, Member-FDIC lending institution.
- Founded: 2013
- Founders: Diwakar Choubey (CEO), Chee Mun Foong (CTO), and Pratyush Tiwari (CIO)
- Parent institution: Fusion Acquisition Corp.
- Partner bank: MetaBank N.A.
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- 6 Reasons Why Digital Banks Are The Future Of Banking
What bank is Monzo with?
Monzo is a challenger bank from London that was launched in 2015 by Gary Dolman, Jason Bates, Jonas Huckestein, Paul Rippon, and Tom Blomfield. The neobank was granted a full banking license in 2017 after having a provisional banking license at first. For its expansion in the US, the British bank will be using Sutton Bank, Member FDIC, for its banking services.
Monzo is famed for setting the record for “quickest crowd-funding campaign in history” by raising £1m in 96 seconds.
- Founded: 2015
- Founder: Gary Dolman, Jason Bates, Jonas Huckestein, Paul Rippon, Tom Blomfield
- CEO: TS Anil
- Fully licensed in the UK
What bank is N26 with?
N26 was founded in 2013 by Maximilian Tayenthal and Valentin Stalf. It’s a privately held company headquartered in Berlin, Germany, and operates in the EEA and the US. In Europe, the company was granted a full banking license by the European Central Bank and is authorized by the German Federal Financial Supervisory Authority (BaFin).
In the United States, N26 partnered with Axos Bank to bring the N26 account and Visa debit cards.
- Founded: 2013
- Founders: Valentin Stalf, Maximilian Tayenthal
- CEO: Nicolas Kopp
- Partner bank: Axos Bank in the US
- Full banking license in the EEA
What bank is Nubank with?
Nubank was started in 2013 by Adam Edward Wible, Cristina Junqueira, and David Velez (CEO) in São Paulo, Brazil. They started out by offering credit cards and then launched a digital account. They managed to get a full banking license in 2017 after several years of not being able to get one.
- Founded: 2013
- Founders: Adam Edward Wible, Cristina Junqueira, David Velez
- CEO: David Velez
- Full banking license in Argentina
What bank is One with?
One was launched in 2019 by Bill Harris and Brian Hamilton (CEO). It’s a privately held company with headquarters in San Francisco, California. It doesn’t have a banking license and had to partner with the Coastal Community Bank, Member FDIC, to offer banking services and cards to its customers.
- Founded: 2019
- Founders: Bill Harris and Brian Hamilton (CEO)
- Partner bank: Coastal Community Bank
What bank is OnJuno with?
OnJuno got its start in 2019 by Ratnesh Ray, Siddharth Verma, and Varun Deshpande (CEO). The fintech company doesn’t have a banking license and isn’t a bank. To offer banking services, it partners with Evolve Bank and Trust, Member FDIC.
- Founded: 2019
- Founders: Ratnesh Ray, Siddharth Verma, Varun Deshpande (CEO)
- Partner bank: Evolve Bank and Trust
What bank is Oxygen with?
Oxygen was founded in 2018 by Hussein Ahmed (CEO). It’s a privately held company with headquarters in San Francisco, California. Oxygen isn’t a bank and doesn’t have a banking license. For that reason, the challenger bank partnered with a proper bank – The Bancorp Bank, Member FDIC to offer people financial services.
- Founded: 2018
- Founders: Hussein Ahmed (CEO)
- Partner bank: The Bancorp Bank, Member FDIC
What bank is Payoneer with?
Payoneer was founded in 2005 by Yuval Tal. This fintech offers financial services worldwide and is regulated in many countries. The company has licenses in 51 US states/territories and five global licenses. In the Us, it’s registered as a US Money Service Business (MSB) and doesn’t have a banking license.
- Founded: 2005
- Founders: Yuval Tal
- CEO: Scott Galit
- E-money institution authorized by the Central Bank of Ireland, passported throughout the EEA
- Licensed Money Service Operator with the Hong Kong Customs and Excise Department
- Registered Fund Transfer Service Provider with the Kanto Finance Bureau (KFB)
- Licensed by the Australian Securities & Investments Commission (ASIC) to deal in non-cash payment products
- Online Payment Gateway Service Provider (OPGSP) registered with the Reserve Bank of India
What bank is Quontic with?
Quontic was founded in 2009 by Steven Schnall (CEO) when he bought Golden First Bank and rebranded it as Quontic Bank. The bank already had a full banking license and therefore didn’t have to partner with other banks to offer financial services.
- Founded: 2009
- Founder: Steven Schnall (CEO)
- Privately held
- Fully licensed
What bank is Revolut with?
Revolut was established in 2015 by Nikolay Storonsky (CEO) and Vlad Yatsenko in London, England. Since then, fintech has expanded worldwide. Revolut doesn’t have a banking license in the US and has partnered with Metropolitan Commercial Bank to offer banking services, accounts, and prepaid Mastercard.
In the EU, the company has a banking license granted by the Lithuanian National Bank. It also applied for a banking license in the UK and Australia in 2021.
- Founded: 2015
- Founders: Nikolay Storonsky (CEO) and Vlad Yatsenko
- Partner bank in the US: Metropolitan Commercial Bank
- Applied for a license in the UK and Australia
- Full banking license in the EU from Lithuania
What bank is SoFi with?
SoFi (Social Finance, Inc.) was created in 2011 by Daniel Macklin, Ian Brady, James Finnigan, and Michael Cagney. It’s a financial technology company that doesn’t hold a banking license and isn’t an actual bank. It had to partner with The Bancorp Bank to provide banking services to its customers.
- Founded: 2011
- Founders: Mike Cagney, Ian Brady, James Finnigan, Dan Macklin
- CEO: Anthony Noto
- Partner bank: The Bancorp Bank, Member FDIC
What bank is Starling with?
Starling was started in London in 2014 by Anne Boden (CEO). The company has a full banking license since 2016 and can therefore offer checking and savings accounts, loans, cards, and other financial products and services.
- Founded: 2014
- Founder: Anne Boden (CEO)
- Fully licensed in the UK
What bank is Ualá with?
Ualá was founded in 2017 by Pierpaolo Barbieri. It is still a privately held company headquartered in Buenos Aires, Argentina. It’s also not a bank but rather a financial technology company. It’s regulated as a payment service provider in the Registry of Payment Service Providers with the Central Bank of Argentina.
Fintech has plans to acquire Wilobank, Argentina’s first digital bank, and that move would bring over Wilobank’s license as well.
- Founded: 2017
- Founder: Pierpaolo Barbieri (CEO)
- Payment services provider in Argentina
What bank is Varo with?
Varo was established in 2015 by Assaf Guery, Colin Walsh (CEO), Mykola Klymenko, Roger Van Duinen and is known as the first challenger bank in the country to get a national banking charter in 2020. Before this major event for them happened, the company was partnering with Bancorp Bank.
- Founded: 2015
- Founders: Assaf Guery, Colin Walsh, Mykola Klymenko, Roger Van Duinen
- CEO: Colin Walsh
- Full banking license in the US
What bank is Venmo with?
Venmo was founded in 2009 by Andrew Kortina and Iqram Magdon-Ismail. It was acquired in 2013 when PayPal bought Braintree, their parent company, for $800 million. Venmo is a fintech that is a so-called ‘nonbank money transmitter’ and is not a bank. All of its money transmissions are provided by PayPal, its parent company.
- Founded: 2009
- Founders: Andrew Kortina and Iqram Magdon-Ismail
- Acquired by PayPal
- Money transmitter
What bank is Wise with?
Wise was created in 2011 by Kristo Kaarmann and Taavet Hinrikus. The fintech is registered as a money transmitter in the US and doesn’t hold a banking license. Its financial services are offered by its partner bank Community Federal Savings Bank.
In the UK, Wise is licensed as an e-money institution (EMI). It has a similar arrangement with government institutions across the world. In the EEA, the company was granted a banking license by the National Bank of Belgium and ‘passports’ its license across Europe.
- Founded: 2011
- Founders: Kristo Käärmann (CEO) and Taavet Hinrikus (CEO)
- Partner bank in the US: Community Federal Savings Bank
The bottom line
Digital banks and financial technology companies are partners with many established banks around the US. And, although more and more established banks are coming to ‘help’ digital banks in their endeavor, there are a few names that we can see over and over.
Those banks are the Bancorp Bank, Evolve Bank & Trust, Coastal Community Bank, Metropolitan Commercial Bank, Suton Bank, and the Lincoln Savings Bank.
You might even see their names on your bank statements as they are the ones that are providing financial services when you sign up for a digital account.
RELATED:
- Are Digital Banks Profitable In 2021?
- Who Owns The 27 Biggest Digital Banks?
- Are Digital Banks Safe?
- 6 Reasons Why Digital Banks Are The Future Of Banking
Adrian Volenik is a fintech enthusiast who loves testing and reviewing digital banking apps and financial products in general. How many digital banking accounts can one man have? Not enough, if you ask Adrian. As his wallet will soon explode if he doesn’t cut back on the number of cards.
