UK-based neobank Kroo announced that it has received a restricted banking licence from the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), according to media reports. Kroo is the one of the only two banks to be authorised in 2021 so far and the latest license gives the bank the authority to collect deposits of up to £50,000 in total and also offer other smaller financial services for its customers.
The bank has been given this opportunity to test out its systems and its infrastructure and make sure that it will be able to handle bigger deposits, more features, and a high number of consumers when it switches to the final banking license. It’s expected that sometime next year, the testing phase will be complete.
As a part of its product expansion, Kroo has also raised a total of £30 million in venture capital funding since launch. The bank will offer loans later in 2022 and grow its workforce across technology, marketing, risk, compliance and customer support.
Andrea De Gottardo, CEO of Kroo told the media, “It is incredibly exciting to finally be a bank that is authorised with restrictions. Very few firms in the UK get to this point and this represents a huge milestone for the entire team.”
Kroo started off its services as a simple prepaid card and an app that lets its users make payments, add friends, track spending, etc. All these services proved to be very useful and popular among its users, which is a major reason behind the neobank’s growth over the last couple of years. The bank also seeks to slowly wind down its prepaid cards once it receives its full banking license as it will be able to offer savings and current accounts and other financial services that any bank would be able to offer.
In the future, neobanks are expected to slowly and steadily replace the traditional banks and the legacy systems in the coming years as our world becomes more digitised and financial services start getting delivered through mobile apps and the internet.