Digital challenger Revolut is seeking to become an official bank, applying for a licence from the European regulator.
The fintech startup which started out focusing on money transfers with a pre-paid card for spending abroad, but has since expanded into more services, will now go all-in and become a bank in its own right.
Previously its has operated with an e-money licence which allows it to offer bank-like services, but a full European banking licence will allow it to offer credit and deposit services.
It expects to gain approval in the first half of next year and is planning to introduce overdrafts, personal loans as well as term deposits, with customer cash coming under the European Deposit Protection scheme.
The startup, which raised $66m over the summer from top investors and a further $5m from private investors via crowdfunding, said it made more sense to apply for a Europe licence, rather than a UK one so it can take advantage of passporting and a quicker process of gaining approval.
Another high profile fintech firm, peer-to-peer lender Zopa, is also seeking a banking licence in a year where competition among startups is heating up.
Revolut has also unveiled plans to move its own payments processing in-house, following in the footsteps of fellow challenger bank Monzo, so that it can have greater control over its services.
A spate of outages have hit several fintech firms in recent months, including Revolut and Monzo, with a third-party supplier to blame.