In a strategic move aimed at broadening its financial services, the Singapore-based payments startup Airwallex, valued at an impressive $5.6 billion, has announced its intent to pursue banking licenses in both the United Kingdom and the United States. This ambitious plan is designed to facilitate the company's entry into the lending sector and enhance its competitive edge against established global banks.

Jack Zhang, the company's chief executive officer, revealed in an interview with the Financial Times that Airwallex is preparing to apply for a banking license in the UK, a market Zhang deems highly favorable for fintech enterprises. He stated, “The UK is one of the most friendly markets for fintechs... the [Financial Conduct Authority] is still one of the best regulators.” This underscores his belief that the UK’s regulatory environment is conducive for financial innovation.

However, the process of becoming a regulated bank in the United States is expected to be much more intricate. Zhang pointed out the complexities involved due to the multitude of regulators and state-specific licenses that dominate the US banking landscape. Consequently, he indicated that Airwallex would likely pursue regulatory approval through the acquisition of an existing US bank in the future.

Founded in Melbourne in 2015, Airwallex has since relocated its headquarters to Singapore. The company has carved a niche in the financial technology sector by offering banking services and multicurrency payment solutions to global enterprises, including notable clients like the prestigious car racing team, McLaren. Despite its rapid growth, Airwallex's operations have predominantly been reliant on payment licenses, which has restricted its ability to provide credit services at scale. To address this limitation, the firm is piloting a credit card initiative in Australia.

“Any product that a global bank has, we will have,” Zhang boldly asserted, expressing his ambition for Airwallex to compete directly with traditional banks. He further predicted that within a decade, the company intends to displace certain established global banks.

The last funding round for Airwallex was notably backed by Lone Pine Capital, alongside prominent investors such as Tencent and HongShan, the latter being the former China branch of the US venture capital powerhouse, Sequoia Capital. With these financial endorsements, Airwallex has continued to expand its suite of services, which includes essential functions like staff payroll and supplier payments across various currencies.

In 2022, Airwallex successfully entered the French and Benelux markets and is now gearing up for launches in Ireland and Germany. Despite these proactive steps towards securing a regulatory foothold in the UK, Zhang has made it clear that the company is not pursuing an initial public offering (IPO) in Britain. Instead, he has set his sights on a listing in the US, citing the American market as the “most liquid capital market and most accessible capital market in the world.”

The CEO, who has previously served as an engineer at both Aviva and the Australian National Bank, emphasized that London still lags behind the US in terms of capital access. He noted that for companies of the size of significant players like Klarna, the United States remains the primary option for capital market engagement, criticizing the London Stock Exchange for failing to effectively differentiate itself or enhance its appeal to emerging fintech firms.