Financial technology startup TransferWise has reportedly announced that it has recently secured a license from UK’s Financial Conduct Authority for offering retail investment services to its customers. The startup has planned to launch a new service that will allow users to passively invest in investment funds from third-party providers.
According to Kristo Kaarmann, the CEO and Co-founder of TransferWise, the company has witnessed that people have increasingly started to send and receive money on an international level over the past three to four years. He has further added that the most common problem faced by its users is to search a way of making returns on their cash. Through the new service, TransferWise intends to take a different approach from traditional banks that typically lend out customer deposits and charge interest, added Kaarmann.
For the uninitiated, TransferWise was founded in 2011 and has successfully emerged as one of the top fintech startups in Europe. The company had a valuation of $3.5 billion in the previous year and has racked up around 8 million users at the global level, processing about £4 billion worth of transactions every month. Its investors comprise Andreessen Horowitz, Peter Thiel’s Valar Ventures, and Richard Branson.
TransferWise had originally started its operation for sending money online at the international level. The company has made a deeper push into the banking industry in 2018 by providing a borderless multi-currency account linked to the customer’s debit card. The platform’s users have reportedly deposited around £2 billion with the account so far.
As per sources, TransferWise is not the only fintech company considering to take on the investment industry. There are several other companies including Revolut, Robinhood, and eToro, that have become popular due to their cryptocurrency-trading and zero-fee stock features.
TransferWise, however, does not look forward to act as a stockbroker and its first investing feature is expected to roll out in the upcoming year. The product will be launched first in the U.K. and the company is hoping for an international roll out later down the line.