The Banking License Trade-Off Every Fintech Eventually Faces

Alejandro Martínez · 2026-10-19

Getting a banking license sounds like the ultimate milestone for a fintech. It opens doors, expands what you can legally do, and signals maturity to partners. But here's the catch nobody puts on the pitch deck: it also comes with heavy costs, long timelines, and relentless capital requirements that can slow your growth right when you need speed most. And yet, a growing number of payment companies, small business service providers, and lenders are choosing to go through with it anyway. That tension — agility versus growth — was the whole point of a recent panel discussion hosted by France FinTech in partnership with Linklaters during the French FinTech Weeks. The roundtable brought together Pierre-Marin Campenon, COO of Younited, Marc Lanvin, deputy CEO of Floa, and Charlotte Gounot, deputy CEO of Defacto. Here's what their experiences reveal. ### Three Companies, Three Very Different Paths to a License At Defacto, the conversation started in late 2021 after the ACPR — France's banking regulator — asked the company to clarify how it was operating. That pushed Defacto to choose between getting its own license or leaning on a partner bank. Either way, capital requirements would apply, whether directly or through equity covenants imposed by lenders. Defacto went with its own financing company license, which took thirteen months to approve. Younited's story goes back further. In 2009, the company wanted to build a more responsible, digital-first approach to consumer credit. That vision led it to apply for a credit institution license, granted in 2011 after a 24-month review. Floa faced a different challenge: keeping its license as capital requirements climbed. Giving up the banking license would have weakened partner trust, especially as buy-now-pay-later took off and the European passport became a strategic asset. ### Matching Your Status to Your Growth Ambitions Regulatory requirements shift dramatically depending on whether you produce credit or distribute it, whether you hold loans on your balance sheet or sell them off. The right status depends on your business model and where you are in your development. As Younited pointed out, sometimes a technology solution or a partnership is a smarter alternative to chasing your own license. In lending, every new dollar lent ties up capital. Growing means raising more equity to stay within prudential ratios. There are a few levers you can pull: - Generate equity through profitability - Raise capital regularly - Transfer some risk, often through securitization The originate-to-distribute model supports growth with less capital tied up. But it brings costs, operational complexity, and dependence on funding markets — plus the persistent hurdles of cross-border securitization. Whether it's worth it depends on your stage and funding strategy. ### Why Your Shareholder Base Matters More Than You Think For a licensed institution, shareholder strength is central. Capital requirements apply continuously, and shareholders need to be able to inject more when growth demands it. Floa knows this firsthand. For years, the company was owned by two shareholders, one of which hit hard times. That meant regularly weighing capital increases. A single, solid shareholder can make all the difference between smooth growth and constant fundraising anxiety. The takeaway? A banking license isn't a finish line. It's a long-term commitment that reshapes your capital strategy, your ownership structure, and your growth pace. Choose it deliberately — or don't choose it at all.