The bank charter boom: what fintech leaders need to know right now

Bank charter applications are rising, and fintech brands are driving the trend—according to a recent PYMNTS.com report. Fintechs and digital-first companies are no longer content to sit behind sponsor banks. They want direct access, long-term control, and regulatory permanence.

For fintech leaders, this is more than industry news: it’s a signal. The path to becoming a chartered institution is open, but it demands far more operational maturity than many expect.

The bank charter boom is real and fintech is driving it

According to PYMNTS.com, we’re seeing a surge in applications for new bank charters, including national, state, and specialized structures. Many of these applicants are fintech platforms that previously relied on partnerships to offer banking services.

This shift reflects a strategic decision. Fintechs want to:

• Control their own deposit base
• Reduce reliance on sponsor banks
• Lower funding costs
• Strengthen long-term regulatory positioning
• Increase credibility with customers and investors

A charter transforms a fintech company from a financial technology provider, to a regulated financial institution. That change reshapes the business model.

Benefits of bank charters for fintech brands

It’s not a bad strategy:

• Tech brands benefit from independence. Sponsor bank relationships create dependency: product changes, compliance adjustments, and balance sheet decisions often require negotiation. If the tech is the bank; delivery moves faster.
• Access to deposits directly can improve margins and stability. Funding costs matter.
• Regulatory clarity has its own strategic value. Operating as a chartered institution removes uncertainty about how regulators classify a business.

The challenges most fintech leaders underestimate

For fintech leaders thinking long-term, a charter offers control and durability, but it also brings an entirely different level of scrutiny. Charter approval is a regulatory commitment, not a one-time branding milestone.

Once approved, institutions face:

• Ongoing examinations
• Board-level oversight of risk
• Full BSA/AML programs
• Consumer compliance requirements
• Documented operational resilience

Growth metrics don’t replace governance. Product innovation doesn’t excuse weak controls. Regulators expect evidence that the organization can operate safely at scale.

That’s where many fintechs discover the real hurdle.

The quiet differentiator: infrastructure maturity

Regulators evaluate safety and soundness. In a digital-first institution, infrastructure underpins both.

Examiners look at:

• Cybersecurity frameworks aligned with FFIEC and NIST guidance
• Data governance and access controls
• Logging and audit visibility
• Incident response documentation
• Business continuity and disaster recovery testing
• Third-party risk management

Infrastructure becomes part of your charter narrative, not just a backend concern. 

Why compliant and secure hosting solutions matter more than ever

Not all cloud environments support regulated financial workloads equally. Fintechs pursuing charters must think carefully about:

• Isolation between core and non-core systems
• Clear responsibility models between vendors
• Performance stability under load
• Audit readiness and documentation

Shared, generalized infrastructure may work during startup growth, but it rarely satisfies examiner-level scrutiny without additional structure.

Compliant, purpose-built hosting environments give fintech leaders a defensible answer when regulators ask how digital systems are secured, monitored, and governed. They complement core banking systems rather than replacing them. They provide the isolation and accountability required for non-core, mission-critical workloads.

For a deeper breakdown of why infrastructure becomes foundational during the charter process, read our long-form guide: How to get a bank charter: it starts with your infrastructure.

For fintech leaders considering a charter, start here

The bank charter boom presents real opportunity. But the fintechs that succeed will treat infrastructure as strategy, not plumbing.

Before filing an application, conduct an infrastructure readiness assessment. Map your systems to regulatory expectations. Clarify ownership boundaries. Strengthen documentation. Test resilience.

Liquid Web’s financial services hosting solutions support fintechs operating in regulated environments. Our Specialty Cloud approach provides isolated, compliance-ready infrastructure for non-core but mission-critical systems, delivering predictable performance and clear accountability without putting the core at risk.

If the charter conversation has started in your boardroom, your infrastructure conversation should start next.