British fintechs are stepping up plans to acquire US banks as regulators signal a more relaxed approach to mergers under the Trump administration.

According to the Financial Times, UK digital banks Revolut and Starling are exploring the purchase of nationally chartered banks in the US, a move that would grant them American banking licenses and allow them to lend across all 50 states.

Revolut, Europe’s largest fintech, has held discussions with advisers including Bank of America about a potential deal, one person familiar with the matter said.

Acquisitions are seen as a faster way of securing a license compared with applying directly, while also giving fintechs access to new customers and deposits.

This comes at a time when UK fintechs are winning customers at home at a slower pace.

Declan Ferguson, Chief Financial Officer at Starling, said the company was weighing both options:

“We’re considering both paths although we are probably more inclined towards acquisition.”

Revolut and Bank of America declined to comment.

The takeover plans come as regulators adopt a more permissive stance on deals.

Michelle Bowman, Vice Chair of Supervision at the Federal Reserve, signalled a more bank friendly approach, including quicker approvals of mergers, shortly after being confirmed in June.

Meanwhile, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (OCC) have withdrawn previous guidance that made transactions more difficult.

Although banks can apply for charters through the OCC, the process has historically taken years.

In 2021, Monzo withdrew its US application after regulators indicated approval was unlikely.

Some fintechs have already pursued acquisitions.

OakNorth, the UK business lender, bought Michigan based Community Unity Bank in March.

Executives at major UK fintechs now believe Trump’s deregulatory push will make both applications and mergers easier.

Two executives said they had observed a shift in the OCC’s attitude, with more fintechs exploring the direct application route.

Klarna, the buy now pay later firm preparing to list in New York, is also considering a US banking license but will likely decide after its flotation, one person said.

Klarna declined to comment.

However, acquisitions can still present challenges.

Watchdogs closely examine ownership changes to ensure the buyer has the infrastructure to maintain operations.

Another hurdle is the US retail banking sector’s reliance on physical branches, unlike the UK where traditional lenders have reduced their high street presence.

Digital banks that buy into the US may inherit costly branch networks. OakNorth now operates its first branch in Michigan.

Featured image credit: Edited by Fintech News America, based on image by leoaltman and pallewaththefiverr2022 via Freepik