Fiinu says the new plugin will be a “gateway to better financial inclusion”.
Banking fintech Fiinu is readying to introduce a world-first plugin overdraft after joining the London Stock Exchange (LSE) with a £53m valuation.
The company secured its bank licence and authorisation, ending a five-year journey, and has now had its shares admitted to trading on AIM, the LSE’s market for small and medium-sized businesses.
Backed by open banking, the company’s new plugin will provide access to overdrafts without customers having to switch banks or current accounts.
Customers will be able to use their existing accounts as usual and benefit from the platform, which will sit outside their existing bank risk appetite.
“Today heralds the start of a new era in banking,” Fiinu CEO Chris Sweeney said.
“Our unique Plugin Overdraft is the gateway to better financial inclusion and a welcome addition of a product made possible through open banking.”
The fintech’s underwriting models differ from traditional underlying risk-based underwriting methods, which allows it to extend its overdraft credit to a wider population than traditional banks can.
“With the cost-of-living crisis in full effect, we are working hard to bring the Plugin Overdraft to market as quickly as possible,” Sweeney added.
“We are grateful for the support of our financial regulators who see the role that a new innovative retail bank can play for the UK’s hard-pressed customers.”
After it receives its licence, Fiinu will be able to launch the platform and provide Financial Services Compensation Scheme-guaranteed deposits in the UK, guaranteed for up to £85,000.
The fintech is set to be acquired by media company Immedia in a reverse takeover, after which it will be listed on the LSE for the first time.
Fiinu founder Marko Sjoblom explained that they chose the LSE because of the UK government’s support of the fintech industry.
While some companies have turned to New York for their IPOs since Brexit, Fiinu is “here for the long-term”.
“What also makes this step exciting is the start of a new generation of Plugin product opportunities, enabled by the OBIE initiative,” Sjoblom said.
“It has been a vision of mine for a long-time that one day our Bank Independent Overdraft platform will create a new market where unbundled overdrafts will increase financial fairness and freedom for everyone, everywhere.”