N26's Co-Founder, Valentin Stalf, to Vacate CEO Position and Transition to Supervisory Board Role

Fintech company Wise, formerly known as TransferWise, is reportedly contemplating a significant shift in its business model by becoming a fully-fledged bank in the UK. This potential move, which is still in its early stages, could see the company convert the funds it currently safeguards into deposits, thus enabling it to recycle these funds into lending opportunities.

The founding CEO of Wise, Kristo Käärmann, has confirmed the rumours, stating that a dual listing would bring substantial strategic and capital market benefits. The dual listing, which Wise announced in June, aims to help the company drive greater awareness in the US, the biggest market opportunity for its products, and enable better access to the world's deepest and most liquid capital market.

John Cronin, a banking analyst at SeaPoint Insights, believes it is "entirely plausible" that Wise would seek to become a fully-fledged bank. Wise has already taken steps towards this goal, having spoken with experienced financial services executives over the past two months about roles in a potential banking business.

However, it's important to note that Wise is not currently a licensed deposit taker and operates under electronic money rules, meaning customer funds cannot be used for lending and must be ring-fenced. To become a bank, Wise would need to apply for a banking license, a process that is yet to be initiated.

If successful, this transition could provide Wise with direct access to the UK's payment infrastructure. This direct access could potentially reduce Wise's reliance on third-party banks for clearing and settlement, reducing costs and operational complexity. By becoming a national trust bank in the US, Wise could settle dollar payments directly with the Federal Reserve, further reducing costs and potentially accelerating transfers.

The dual listing is part of Wise's ongoing commitment to the UK. Founded in 2011, the company rebranded to Wise in February 2021 to reflect the expansion of its services beyond money transfers. A spokesperson for Wise, however, has stated that the company does not comment on "rumours or speculation."

In June, Wise announced plans to move its primary listing to a US stock exchange while maintaining a secondary listing on the London Stock Exchange (LSE). This move, coupled with the potential transition to a bank, suggests a strategic shift towards capitalising on the opportunities presented by the US market.

As Wise navigates these potential changes, it remains committed to its mission of making money movements faster, cheaper, and more convenient for people around the world.

N26's Co-Founder, Valentin Stalf, to Vacate CEO Position and Transition to Supervisory Board Role