Digital banking brand Varo has 1 million customers, and is pushing ahead with plans to become a nationally-chartered bank early next year, CEO Colin Walsh told Bank Innovation Tuesday.

The four-year-old company received conditional approval for a national bank charter from the Office of the Comptroller of the Currency in August, a process it initiated in 2017. Securing approval from the Federal Deposit Insurance Corporation has been more challenging for Varo, but Walsh said the company is making encouraging progress.

“The [FDIC application] process is going quite well,” he said. “Once we have FDIC approval and OCC approval, then we’ll go to the Federal Reserve to set up a bank holding company. We’ll be looking to open the bank in the first half of next year.”

The company applied for federal deposit insurance from the FDIC in 2016; it subsequently withdrew its application in 2018 to meet FDIC conditions, including key hires, policies, procedures and technology requirements, Walsh explained. In addition, Varo previously told Bank Innovation that it was talking to regulators about its Community Reinvestment Act plans.

See also: Varo’s FDIC application tests uncharted territory

Varo offers checking accounts, savings accounts and installment loans. Becoming a nationally-chartered bank will help Varo differentiate through an expansion of its product suite, said Walsh. Like other digital-only banks, Varo intends to grow relationships with customers through multiple product relationships and integrations with other platforms. According to the company, 60% of its customers have more than one product relationship with the brand.

“There are things that we will be able to do across a broader set of products — including credit, deposits, cash flow, savings and lending — much more seamlessly as a national bank,” noted Walsh.  “[It includes] things we will be able to do with our data, and the whole basic banking experience.” With a banking charter, Varo will be able to deliver a more comprehensive group of offerings, including joint accounts, wire transfers, money market accounts and certificates of deposit, he added.

Varo also seeks to set itself apart from competitors on product design. Asked about the company’s decision to pull back on a savings goals feature earlier this year, Walsh emphasized that Varo doesn’t want to impose the same personal finance solution on all of its customers.

Instead, it plans to roll out a personalized app experience based on data. “We have fairly rich information on customers that allows us to use notifications like alerts and email, even the sort of the welcoming experience when you come into the app,” he said. “It’s about how to welcome you in a way that is much more about you and what we know about you. Over time, you’ll start to see Varo using its data in interesting and sophisticated new ways.”

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