• Chime plans to acquire banking partner Stride Bank for $590 million in cash
• CEO Chris Britt says becoming a bank will accelerate product launches and give Chime greater control over its future
• AI is increasing pressure to develop and deliver new financial products more rapidly
• Owning Stride could reduce funding costs and eliminate bank partner fees
• Chime expects bank status to strengthen trust among consumers wary of fintech banking models
• A national charter could support geographic expansion and a broader range of lending products

Chime’s proposed $590 million acquisition of Stride Bank will allow the fintech to accelerate product launches, cut costs and strengthen customer trust by bringing banking infrastructure directly under its control, according to CEO Chris Britt.

San Francisco-based Chime announced plans this week to acquire Enid, Oklahoma-based Stride, one of its existing banking partners.

The transaction would combine Chime’s technology platform with Stride’s banking infrastructure, while eliminating partner fees and potentially reducing funding costs.

Speaking at a Goldman Sachs investor conference, Britt described becoming a bank as an “inevitability” if Chime was to achieve its ambition of becoming a leader in banking.

The timing has been influenced by both a more receptive US regulatory environment and the increasing speed of technological development.

Britt argued that artificial intelligence is allowing financial companies to develop products and services considerably faster, making control over the entire development and delivery process increasingly important.

“With artificial intelligence, you can create new products, new services, new experiences faster than you ever could,” Britt said.

“When we look at all the innovation, how quickly things are changing in the age of AI, we have to have full control of the product output and delivery cycle.”

Chime’s existing partnership model has required regulated products to undergo legal, compliance and other reviews involving both Chime and its partner banks.

Although Britt said those arrangements had not prevented Chime from introducing products, the additional stages had sometimes slowed development.

“There’s no question that we haven’t been able to move as fast as we would like,” he said, pointing to differences in risk tolerance and compliance perspectives between Chime and its banking partners.

Owning a charter should allow the company to streamline those processes while giving it greater control over the resilience of its underlying banking platform.

“We are at a size and a scale when we need to have complete control of our destiny,” Britt said.

The move comes as fintech companies increasingly pursue banking charters, either through applications or acquisitions. SmartBiz, Enova and OppFi have pursued bank purchases, while companies including Upstart, Affirm and PayPal have sought their own charters amid greater regulatory openness to new banking models and consolidation.

For Chime, however, Britt believes becoming a bank could deliver benefits extending beyond operational efficiency.

He argued that directly associating the Chime brand and app with a regulated bank could reassure consumers who remain uncomfortable holding money through fintech platforms reliant on third-party institutions for Federal Deposit Insurance Corp. coverage.

“More directly connecting Chime brand and Chime app to a bank is most certainly going to unlock greater levels of trust for certain segments of the population,” Britt said, adding that some customers simply “want it all from one provider.”

The acquisition could also significantly expand Chime’s lending ambitions. Britt said owning a national charter would create opportunities to enter geographic markets previously unavailable to the company and support the development of additional credit products.

Chime is already testing an unsecured revolving credit line among a group of loyal, higher-income customers and expects to expand its lending offering over time.

Acquiring Stride, which has approximately $5.4 billion in assets, would also enable Chime to hold consumer deposits directly and use them to fund lending.

Under its existing arrangements, customer deposits are held by partner banks, which can subsequently provide funding to Chime for its credit activities. Removing that additional stage should create greater flexibility and efficiency.

The deal therefore represents considerably more than a change in Chime’s regulatory status.

If completed, it would transform the fintech from a technology company operating alongside banking partners into an institution controlling much more of its own financial infrastructure.

For Britt, that control appears increasingly essential as AI accelerates the pace at which financial products can be developed – and competition between traditional banks and their fintech challengers intensifies.