How to Launch a New Online Bank in 2025, part 2

A 2025 playbook: from idea to live online bank

Think of this less as strict legal advice and more as a roadmap to structure your work.

Step 1 – Decide who you’re really building for

Are you solving problems for:

• Gen-Z customers with no patience for branches?
• SMEs struggling with cross-border payments?
• Creators and freelancers whose income is messy and irregular?
• Migrant workers sending money home every month?

Your target group changes everything: licence choice, features, risk profile, pricing and even who you hire first.

Step 2 – Choose a regulatory path and jurisdiction

Broadly, your options look like:

• Full banking licence (EU credit institution, US national bank / state-chartered bank)
• Payment institution or electronic money institution (EU/UK)
• Non-bank lender or fintech under a partner bank’s licence

To understand the EU landscape, start with the Commission’s payment services pages and the new Financial Data Access and Payments Package (PSD3 + PSR):Financial data access and payments package – European Commission European Commission Finance

For a US-facing model, look at the OCC’s licensing manual on charters and the FDIC’s de novo handbook to see what a full bank application entails:OCC – Charters manual occ.govFDIC – Applying for deposit insurance FDIC

At this stage, many founders realise a payment-institution/EMI route or a partnership model is a better first step than a full charter.

Step 3 – Draft a real business plan (not just a deck)

Regulators want a proper three-year plan, not a one-pager.

Under the EBA Guidelines, payment institution applicants must submit:

• detailed financial projections
• explanations of income and cost drivers
• cash-flow forecasts
• capital and own-funds calculations European Banking Authority

For you, this exercise forces clarity: what products you launch in year one, how you price, how you acquire customers, and when you realistically break even.

Step 4 – Design your internal structure and key roles

Before you apply, sketch an org chart that makes sense:

• Board with a mix of banking, tech and risk experience
• CEO, CFO, CRO, CCO/MLRO, CTO/CIO
• Clear “three lines of defence”: business, risk/compliance, internal audit

Supervisors will ask for CVs, role descriptions and an explanation of how responsibilities are divided. Be prepared.

Step 5 – Build (or assemble) your tech stack

You don’t have to write everything from scratch. In 2025, most digital banks combine:

• Core banking / ledger (often a specialist vendor)
• Card issuing and processing
• KYC/AML providers
• Fraud and risk engines
• Customer-facing apps (mobile + web)
• Data warehousing and BI

Just remember: as far as regulators are concerned, outsourcing does not mean outsourcing responsibility. You will need policies on outsourcing, vendor risk, and contingency if a provider fails.

Step 6 – Design onboarding, KYC and user lifecycle

This is where your elegant UX meets reality:

• Registration flows and identity verification
• KYC checks (documents, databases, risk-based questions)
• Transaction monitoring rules
• Sanctions and PEP screening
• Procedures for blocking, reporting and exiting customers

Under PSD2 and anti-money-laundering rules, supervisors will look closely at whether your AML/CFT framework is more than a checkbox.

Step 7 – Wire in payments, cards and cash flows

Depending on your model and jurisdiction, you might need:

• Access to SEPA / instant payments in Europe
• Card scheme membership or sponsorship (Visa/Mastercard)
• Correspondent banking partners for FX and cross-border flows
• Safeguarding accounts or trust arrangements for client money (if you’re not a bank)

Each connection creates technical work and legal contracts—and your supervisor will expect to see how funds move through your ecosystem in practice.

Step 8 – File the application and start the dialogue

By now you’ll have:

• Business plan and financial model
• Policies and procedures (risk, compliance, IT, outsourcing, AML/CFT, etc.)
• Governance and org charts
• Tech-architecture overviews
• Capital documentation and shareholder information

For EU payment institutions, the EBA guidelines spell out the information package in detail so there are fewer surprises:EBA Guidelines on authorisation and registration under PSD2

Once your file is in, expect rounds of questions. Treat this as a conversation, not a battle.

Tech and market trends shaping online banks in 2025

Finally, even if you get the licence and the stack right, your bank has to live in the real world. A few forces to watch:

• The EU’s PSD3/PSR package aims to tighten fraud rules, harmonise supervision and bring electronic money fully into the payment-services framework—important for anyone mixing cards, wallets and crypto. European Parliament
• Instant payments and open-banking APIs are becoming the default, not the novelty.
• AI is reshaping risk scoring, customer support and personal finance tools—but supervisors are paying attention to model risk and fairness.
• Cyber-security expectations are only going one way: up.

The bottom line

Starting an online bank in 2025 is neither a weekend side-project nor an impossible mission reserved for incumbents. It’s somewhere in between.

You’ll need capital, patience, and a team that speaks both product and regulation. You’ll need to understand PSD2/PSD3 or US banking rules as fluently as you understand CAC and retention. And you’ll need to accept that “move fast and break things” doesn’t work when you’re handling people’s salaries and savings.

But if you’re willing to play the long game—build with supervision instead of around it—launching a digital-first bank or licensed fintech can still be one of the most interesting (and impactful) things you can do in financial services right now.