Let's play ... Who Wants To Be a Bank!
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Why are fintech companies racing to become banks?
NPR. This is The Indicator from Planet Money. I'm Waylon Wong.
I'm Ricky Mulvey. But Waylon, this isn't The Indicator.
What? This
is Who Wants to Be a
Bank? Ah, that's right! This is the game show where financial technology companies vie for a shot at a U.S. banking license.
There are all these companies out there that do stuff with our money, but are technically not banks. Payment apps, crypto firms, buy now, pay later companies. They don't have banking licenses, but they want them. And the Trump administration and its regulators want to grant them. In fact, they've already approved more new banks this year than in all of 2025.
Today on the show, why do so many fintech companies want to be banks and what does it take to get there? Find out today on Who Wants to Be a Bank?
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Welcome back to Who Wants to Be a Bank? It's the game show where financial technology companies undergo a grueling process in hopes of winning a coveted banking license and some other goodies.
To explain what's at stake here, we're going to bring on stage Michelle Ault. She's a co-founder of a firm called the Kleros Group. It advises fintechs on becoming banks.
Are you like the fintech whisperer?
Well,
I like to think of myself as the regulatory whisperer. My jam is helping non-banks and fintechs navigate the very perplexing and cumbersome and Byzantine process of getting a bank license in the U.S. And that involves quite a bit of whispering to the regulators and sometimes shouting.
Cool.
Sounds exciting. And Michelle tells us she's been busy lately. That's because one of the main bank regulators in the U.S. has announced that it is once again open for business. It said there were years in which very few new banks got approved, and now it wants more fresh faces to increase competition in the industry.
And what's in it for the fintechs? Michelle says these companies want greater access to the U.S. financial system, even if it comes with more regulatory scrutiny.
It's sort of like, ooh, encumber me, please, encumber me. I love encumbrance.
So what are these prizes waiting at the end of the regulatory rainbow? Michelle, tell them what's behind door number one.
Whelan, they've won deposit insurance.
Yay! That's right. This prize is furnished by the Federal Deposit Insurance Corporation, or FDIC. The government backstops some types of customer deposits up to $250,000. Having this insurance lowers the operating costs for banks. They can collect deposits instead of relying on private, more expensive sources of funding.
Now, there are different kinds of bank licenses in the U.S., Most banks get the FDIC backstop. For other types, there are additional upsides. What's behind door number two, Michelle?
Wait, there's more. They also get access to the Fed discount window.
That's the ability to borrow money from the Federal Reserve. Very useful in emergencies. All right, let's open door number three.
And the biggest grand prize of all, a Fed master account.
This is a bank's account at the Federal Reserve. It allows a bank to talk to other banks and process payments.
This is a critical, critical communication and payment system provided by the Fed.
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