Delivered October 28, 2019. Contributor: Saurav G.
To provide 2-3 case studies of partnerships between neobanks and charter banks in order to determine the steps and requirements for forming such partnerships.
Case Studies of Neobanks/Fintech Startups Partnering with Charter Banks
1. Standard Chartered Bank and eSecLending
According to the OCC, a fintech startup can be qualified for chartering if it is involved in lending activities. In May 2019, eSecLending partnered with the Standard Chartered Bank to offer the clients of the bank with their lending solutions.
The case study provides information related to the benefits of the partnership. However, it does not specify the steps and requirements involved in the partnership process.
2. Case Study on Neobanks and Fintech Startups
This case study focuses on the partnerships of multiple startups in the neobanking space with charter banks. However, it also does not discuss the steps and requirements.
According to the case study, a neobank called Moven partnered with CBW Bank in the US to issue cards for Moven. Similarly, Ingo partnered with Visa in order to eliminate "$33 trillion in paper checks."
Steps and Requirements for Fintech Startups/Neobanks to Obtain a Charter License
The OCC has provided a supplement that provides all the necessary steps, rules, requirements, and details for a fintech startup wanting to obtain a charter license in the US.
In order to receive a charter license, the fintech banks must lend money, pay checks, or do both. According to the OCC, some payment processors could also be eligible for the charter license under the check-cashing core banking function.
All the other necessary steps and requirements have been presented in this document.
The case studies found on the public database within the provided time did not provide the required information (steps and requirements).
The public database was thoroughly searched for information from any government authority or bank specifying the rules, steps, or requirements for partnering with charter banks. However, no such information was found.
Therefore, we have presented the steps and requirements for fintech banks to obtain a charter license from the OCC (Office of the Comptroller of the Currency). The steps could be similar for neobanks/fintech startups that are operating under the license of charter banks.
Only the project owner can select the next research path.