April 13, 2024

Business Bib

Business & Finance Blog

The Trails of Getting Banking License Against all The Odds

6 min read

I will not forget of 8th April 2015, when that day we closed USD of 10 million Series A funding on N26. There was something that happened on that day, and it is crucial and different. Our bank founders have decided to apply for banking license for full Europe.

The strategy is to change an industry sustainably and to rethink about it and to do it; you have to have control of the value of chain over a larger part. The key to fuel innovation is the license, and through it, we can be able to implement and develop state-of-art technologies, quickly new products can be launched, and flexibility to get internationalized. Therefore, the founders asked me if I would be leading the team to obtain the license. And I couldn’t deny as I was excited and it sounded like fun to me. So, I agreed and took the challenge to help the bank building.

There were in total 20 employees working in our first office and was too small for all of us to work to work together in it. Only a few licenses for banking had been granted in the last ten years. Therefore, there’s no one experienced enough to apply for a license in your office. After gathering information about what was needed to master the project successfully, it was clear that we needed a team of experienced experts who will take the responsibility to build the bank as well as run it. The first to join in the team was a former CEO of a big bank.

A license was then drafted with his help and a small team of financial consultants and experts. The draft copy was handed to the regulatory body on the first introductory meeting. Three folders think it was the application, and I was very tensed at that time. The days were really hard, we were busy in proofreading and even used to stay awake till the late night. Every document was printed and organized after sorting them carefully. For sending to the different regulatory, multiple versions were prepared.

Multiple in-depth questions the regulatory boards asked us after we handed over the application. We cleared every question in-person meetings and in written form. All the regulatory boards were satisfied at lastly and then for final checking the application was forwarded to the European Central Bank.

We then were signing 10,000 new clients a month, and the bank was growing fast. We were awaiting the license to be issued as fast as possible. We were trying to move to the fast-track process to earn the license. Then ECB called us on a Friday afternoon and asked us if we need to fast-track the process, we should submit answers to several handwritten answers and submit them by the Monday morning. A couple of colleagues and we worked through the weekend and then submitted the documents by Monday morning. What’s surprising is that we received the license for a bank in a few days. It came via email in PDF format and was signed by Mario Draghi, President of the ECB.

This story looks like the same story as shared by so many startups about the achievement of something big. Many of the third parties will tell you that you can’t do it, and you are going to fail. Everyone will tell you that it is a very complex process and they try to discourage you actively from pursuing it. You should be open to all the feedback, but positive feedback you definitely look into them. The drivers always ensure that the project is successful.

The banking license has helped up to grow exponentially, and we have now around 1 million customers across Europe.

But in this story, one main portion is missing. The details of jobs the financial advisors did with our team to make it successful. The consultants or advisors we hired are from Financial Licensing Advisors. They are a global specialist in financial licensing. They have already established a dozen financial institutions and banks in Europe, the Caribbean, and Asia. They also work in other jurisdictions too. Around 43 countries they have their license services. They have expertise and experience to make your licensing successful.

When we knew about them, I asked the founders that to make our project successful we need to hire them, and they will help us to get our license for the whole Europe Banking successfully. We sat one day with them online, and we discussed our needs, and we wanted to move fast. We asked them about their price, and they were very clear with their replies, and we were satisfied with all their answers and the confidence they were showing of attaining the license for us.

We asked them how much would they charge from us, and the price seemed to us as reasonable. Now, it looks like whatever we did was right, and thanks to them that we have our license in our hand or things would have been tougher. Some people were giving us negative feedbacks, and some were literally trying to smile on us, but we didn’t stop us.

My team, my founders and some other colleague were like made our mind that we need to hire them, and then move with our processes fast. So, they came into our team to help us acquire our licensing because from many positive feedbacks we heard that we should hire financial licensing advisors for making our walk easy for acquiring the license.

When we entered the licensing process, making documents, we understood how complex the way is ahead of us, and it’s good to have someone experienced by your side when they have a huge experience of dealing with the things and institutions. The government institutions are very strict, and they have increased audits and new regulations, as regulations go on changing time-to-time.

Our job was made much smoother with the help of FLA. They showed us how to fulfill the application form, what are the documents we should include in the application and what kind of supporting documents we need to submit to satisfy the government officials. FLA will ensure compliance with audits and the regulations that are upcoming, and they will make you understand the terms and coverage of your license. They assisted us working hard with us so that we never fail to achieve what we want. They gave us inspirations and the whole team was working with them to make our purpose successful.

When we went for the first appointment with our regulatory board, they told us what they can ask us, and what we should expect from them. Helped us prepare all the documents on time, and then there we were in front of the board, ready to be analyzed. So, with their help, we successfully completed dealing with the regulatory board.

Now, when our application was forwarded to the ECL, they told us to wait if we want, as it will take ECL a longer time to determine and check things thoroughly. And they said they are going to try to make our process on fast track. Then the call on Friday came from ECL and asked us to submit handwritten documents to them via Monday.

We were so nervous that time, we weren’t sure we want to move fast-track or not. FLA suggested us to move the fast track, or we could have to wait for a long, long time. We worked through the whole weekend and followed exactly what FLA suggested us and made all the documents ready by the Monday morning. It was one of the most horrible weekends I have ever spent in my lifetime. Anyway, after successfully all the documents were submitted to ECL, after a few days we got the license for whole Europe.

I would recommend whoever is going for licensing of the bank; you shouldn’t listen to negative feedbacks, rather be positive and take help from FLA, they being at your side, you will never feel weak or nervous. They will perfectly guide you to the success.