The past week has been a mixed bag for challenger banks globally. U.S.-based Varo earned a national bank charter, clearing three years of regulatory hurdles and hefty investments; Australia’s DayTek Capital was granted a banking license, joining the likes of Xinja, Judo Bank and Volt; and U.K.-based Monzo posted $149M (£113.8M) loss for the year.

Why should we care?
Regulators are warming to digital-only banking companies that challenge traditional brick-and-mortar models. A pandemic-affected world where lockdowns proliferate has bolstered the case for digital banks. Surely, a banking license will let Varo and DayTek Capital launch broader sets of products; for Varo, this means credit and investments. Meanwhile, Monzo, which was granted a U.K. banking license in 2017, is a cautionary tale for counterparts to keep their eyes on the prize, and by that we mean hatch plans to become profitable as soon as possible. In its annual report, the company noted that the pandemic negatively affected Monzo’s fortunes since consumer spending is down, and product launches were delayed.