SmartBiz Just Became a Bank—What This Means for Fintech & Compliance

Guess who just leveled up? SmartBiz Loans. The fintech company has officially acquired CenTrust Bank, undergone a full rebrand to SmartBiz Bank, N.A., and secured approval from the Office of the Comptroller of the Currency (OCC) to expand its lending services nationwide.

This is a big deal—not just for SmartBiz, but for the entire fintech industry. Historically, fintechs have struggled to obtain banking charters, as regulators have been wary of letting digital-first financial platforms operate as full-fledged banks. Notably, Brex and Mercury explored the idea of purchasing a banking charter a few years ago, but abandoned their plans due to regulatory hurdles.

So why did SmartBiz succeed where others backed off? And what does this mean for fintech, compliance, and banking as a whole? Let’s dig in.

Why This Move Matters

For years, fintechs have enjoyed the benefits of banking—lending, payments, and financial services—without actually becoming banks. Instead, they’ve partnered with licensed banks to sidestep regulatory challenges. SmartBiz’s acquisition of CenTrust marks a shift: rather than relying on third-party banks, more fintechs may now attempt to secure banking licenses of their own.

But here’s the catch: with great power (aka a banking charter) comes great responsibility. SmartBiz is now under direct federal oversight, meaning:

• Lending practices will face more scrutiny. SmartBiz must adhere to fair lending laws, anti-money laundering (AML) rules, and capital requirements.

• Data privacy and cybersecurity regulations will tighten. With access to sensitive financial data, regulatory agencies will be watching how SmartBiz protects consumer information.

• Regulatory examinations will increase. The OCC will conduct regular assessments to ensure compliance with banking laws.
  
  
  

For fintechs considering this path, SmartBiz’s journey will serve as an important case study—proving whether the benefits of banking independence outweigh the compliance burden.

Marketing Claims Need to Keep Up

Fintechs have historically leaned on bold, fast-moving marketing—promising instant approvals, seamless transactions, and effortless funding. But now that SmartBiz is a regulated bank, the stakes are higher.

• No more vague or exaggerated claims. Statements like “instant approvals” or “guaranteed funding” can be misleading and will be subject to truth-in-advertising laws enforced by banking regulators.

• Compliance teams must align with marketing. Every ad, website copy, and social media post needs to be vetted to ensure it meets OCC and Consumer Financial Protection Bureau (CFPB) standards.

• Transparency is key. With increased scrutiny, banks (even fintech-led ones) must ensure their terms, conditions, and disclosures are crystal clear to avoid regulatory action.
  
  
  

A New Era of Fintech-Bank Competition

SmartBiz’s move could open the floodgates for more fintechs to acquire or merge with traditional banks—especially if regulators show a more favorable stance toward these deals. If more fintechs secure banking charters, traditional banks will face new competition in lending, payments, and digital financial services.

This means:

• Traditional banks must rethink digital transformation. Fintechs entering the banking space will prioritize technology-driven banking experiences—forcing legacy institutions to accelerate their digital strategies.

• More fintech-bank acquisitions could be on the horizon. If SmartBiz’s transition is successful, it could pave the way for similar deals, as fintechs seek greater control over lending and compliance.

• Compliance must become a core competency. Fintechs diving into banking will need to strengthen their regulatory teams just as much as their product roadmaps.
  
  
  

What’s Next?

If SmartBiz proves this model works, expect to see more fintechs following in its footsteps—acquiring small banks to fast-track their banking charters. But success won’t come easy. The challenge will be balancing fintech’s agility with the rigid demands of banking regulation.

For marketing teams, this means rethinking messaging—ensuring that branding remains compelling while complying with strict financial advertising laws. For regulators? Well, they’re watching closely.

The fintech-banking hybrid era is just getting started. Buckle up.