Fintechs Shift Strategy to Pursue Bank Charters
Operators are realigning internal functions to secure charters for greater product certainty and faster innovation.
Updated on Sept. 30, 2026 in Financial Services
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Mercury Bank CEO Jon Auxier recently emphasized that fintechs must prioritize securing a national bank charter to maintain long-term competitive growth. The announcement, delivered at the Federal Reserve Bank of Philadelphia's fintech conference, highlights a pivotal shift toward regulatory integration for digital finance firms.
Why it matters
Obtaining a charter allows fintechs to move beyond partnership-dependent models, providing the operational independence needed for faster innovation and product stability. This shift requires companies to fundamentally restructure their internal functions to meet rigorous federal regulatory requirements.
SoFi Bank grew its customer base to 15.8 million, a significant increase from the 3 million users it held when it received its conditional national charter in 2022. Mercury Bank, which applied for its charter in December, currently holds a conditional status and expects to be fully operational by late 2027.
The players
Mercury Bank
A financial technology firm that holds a conditional national bank charter.
Jon Auxier
The CEO of Mercury Bank who advocates for the necessity of bank charters.
SoFi
A major digital financial services company that operates a national bank with 15.8 million customers.
Square
A payments and financial technology firm that secured an industrial loan company charter.
The details
To successfully transition into a chartered bank, organizations must align every internal function with federal compliance standards. Fintechs often hire specialized personnel to navigate the multi-year chartering process, moving away from relying on existing banking partners to build and launch their own financial products with greater certainty.
Timeline
2020: SoFi filed for a national bank charter.
2020: Square obtained an industrial loan company charter.
2021: Square launched its bank.
2022: SoFi received a conditional national bank charter.
Late 2027: Mercury Bank expects to be up and running.
Market Landscape
The push for bank charters marks a shift from third-party reliance toward full regulatory autonomy. This trajectory follows the pattern set by the 2022 SoFi conditional national bank charter approval.
Operators in the fintech space should evaluate whether their current partnership model creates long-term reliance risks that could be mitigated by a charter. Firms considering this path should account for a multi-year timeline, including the hiring of compliance-focused personnel to align operations.
The takeaway
The move toward chartering is an operational evolution from a service-dependent model to a full-service banking entity. Business leaders should monitor the progress of peers like Mercury Bank to identify the specific compliance milestones required for federal authorization.
Further reading
For more on industry regulatory trends, visit the Financial Services section.
Source note: This article includes information reported by Banking Dive.
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