Two different fintech startups recently applied for new bank charters in hopes of creating new online-only banking institutions.

Social Finance Inc, the online lender known as SoFi, applied for a new industrial loan charter with the FDIC in June. While the company listed Salt Lake City, UT as its depositary address, their application clearly stated they will operate as an online-only bank institution with no branches or deposit-taking ATMs. SoFi got its start by refinancing student loans, but wants to expand their services. If approved they plan to offer FDIC-insured NOW accounts, credit card products, and online banking.

SoFi isn’t the only fintech company looking to be approved for a new bank charter. Varo Money, a mobile banking start-up applied for a national bank charter with the OCC and the FDIC in July. They hope to form the first national online-only bank, which will operate under the name Varo Bank. Currently Varo Money is a mobile app that provides users with a new way to manage money. Users can manage their cash flow and track spending across all their savings and credit card accounts. Varo plans to offer consumers with everything they can get from a traditional bank including debit cards, direct deposit, loans, and online bill pay. However unlike most traditional banks, they have won’t have overdraft fees, minimum balance fees, and ATM fees.

New bank charters would allow both companies to offer a wider range of products on a nationwide basis. While both companies have taken a step in the right direction, they still have a long road ahead of them before they can become banks. The most recent financial crisis resulted in stricter regulations, making it harder for existing financial institutions to operate and for new banks to form. Only a small handful of bank charters have been approved by the FDIC in the last decade. Do these fintech firms have what it takes to break that trend? Is fintech the future of the banking? We’d love to hear your thoughts.