UK Digital Bank Kroo Granted Banking License

U.K. digital bank Kroo has been granted a full banking license by the Bank of England, the bank announced Monday (June 27).

Founded in 2016, Kroo has built a customer base of 23,000. The bank said in a press release that in the coming months it intends to offer all of its existing customers the opportunity to migrate to Kroo’s new personal current account for free.

Per the release, in order to obtain a license from the Bank of England, a bank must demonstrate that it has the following: robust processes and systems, compliance and risk management capabilities, a viable business model, fit and proper directors/managers and adequate financial resources.

In addition to its existing services, Kroo will now be able to offer customers overdrafts, loans and savings products. In addition, customers of the challenger bank will now be covered by the U.K.’s Financial Services Compensation Scheme for deposits of up to 85,000 pounds.

“This represents a key milestone in our mission to create a bank that truly connects people financially, enables them to be financially better off and plays its part in making a positive impact on the world,” Kroo CEO Andrea De Gottardo said in the announcement.

“The bar to be granted a UK banking licence is exceptionally high and I am incredibly proud of the team and our work in achieving this. This is one of the elements that will set us apart from most of our competitors in the FinTech industry, alongside our commitment to deliver innovative features and champion values our customers can identify with.”

The news marks the first time the bank of England has issued a new license since it granted one to Cashplus in February 2021.

The latest license to be awarded to a digital-first challenger bank comes at a time when a growing number of Britons are putting their trust in digital only banks and mobile banking apps. With the likes of Credit Suisse coming under increasing scrutiny from U.K. authorities, some people see challenger banks as an alternative to traditional financial institutions.

Read more: UK Regulator Puts Scandal-Plagued Credit Suisse Under the Microscope

Today Credit Suisse was convicted in Switzerland’s federal criminal court for failing to prevent money laundering.

More on this: Credit Suisse Conviction Signals New Money Laundering Liabilities for Banks