Yerbol Orynbayev, president of TurmaFinTech and the former deputy prime minister of Kazakhstan, is urging US regulators to fast-track acquisitions of US banks by UK fintechs. The call comes in response to recent reports that UK firms are exploring such deals to secure American banking licences and establish a foothold in the US market.
Orynbayev argues that the arrival of UK challenger banks would drive healthy competition and accelerate much-needed digitalisation among US community banks.
A window of opportunity for competition
The intervention follows reports that UK fintechs, such as Revolut and Starling, are considering buying US banks as a pathway to securing a full banking licence. Orynbayev noted that while the current US administration has adopted a softer approach to M&A, regulators have previously deterred foreign challenger banks, referencing Monzo’s withdrawal of its US license application in 2021.
He warned that the current M&A-friendly window could be temporary and urged regulators to act quickly to bring a “shake-up” to the US banking sector. According to the release, the ‘Big Four’ US banks currently account for over 40 per cent of the sector’s profits. Orynbayev contends that the entry of players like Revolut and Starling could challenge this dominance, forcing incumbents to improve their product offerings to retain market share.
A catalyst for digitalisation
Beyond increasing competition for major players, Orynbayev suggests that the presence of UK fintechs would also spur technological innovation at community banks. Community banks make up 97 per cent of the US banking sector, yet the release cites data showing that only two-fifths of them are currently leveraging artificial intelligence and machine learning. Orynbayev believes these smaller banks need to innovate to survive, and the presence of digital-first competitors could encourage them to increase their digitalisation expenditure.
Yerbol Orynbayev, president of TurmaFinTech, commented: “Regulators have traditionally been very protective of the US banking market, but they have a window of opportunity here. Now is the time to encourage competition, and UK fintechs’ latest license effort is an opportunity they mustn’t waste.”
He added: “The entrance of these challenger banks will expand and improve product offerings sector-wide, taking the fight to the industry giants who dominate the market. Ultimately, the presence of the likes of Revolut and Starling will benefit community banks, too – acting as a catalyst for digitalization, which, let’s be frank, is sorely needed. Competition across the US banking landscape is stagnating; we need new contenders to spark change and give the sector a shake-up. To halt the decline, regulators must welcome UK fintechs with open arms.”
Orynbayev’s company, TurmaFinTech, provides bespoke customer data platforms for community banks across the US. Prior to his career in fintech, he served as the deputy prime minister of Kazakhstan and was the governor of the World Bank on behalf of the country.
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