The move by Jiko, which bills itself as a new kind of bank, gives it broad access to the highly-regulated U.S. market. Fintech firms have to choose one of three ways to break into this market: acquire a banking institution, apply to become a chartered bank, or partner with an existing lender. That U.S. regulators blessed the Jiko transaction is significant mostly because of how fundamentally different it is: It’s a consumer bank that doesn’t hold deposits.
“The move by Jiko represents an important milestone in the maturity and evolution of fintech companies seeking to expand the reach of their products and services,” Acting Comptroller of the Currency Brian Brooks said in a statement. “It demonstrates the value and attractiveness of banks and in particular the federal banking system.”