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Published on
July 26, 2024
8 min read
Revolut to Unveil Services in UK After Bagging Banking License
Fintech startup, Revolut, has received a UK banking license after a three-year struggle. According to the Financial Times, the Revolut UK banking license will boost the expansion plans of the fintech startup in its home country.
Prior to the UK license, Revolut held a European banking license through its Lithuanian entity. This has helped Revolut to position itself as a bank within the European Union. Earlier this year, the fintech company got another license from Mexico.
However, its prospects were strongly hinged on getting the UK banking license.
Expanded Offerings
The Revolut banking license opens new opportunities for the startup company. The Prudential Regulation Authority (PRA) stamp of approval serves as a vote of confidence for the fintech company. It significantly increases chances of Revolut to be a regulated bank in major markets like the U.S.
“We are incredibly proud to reach this important milestone in the journey of the company and we will ensure we deliver on making Revolut the bank of choice for UK customers,” Nik Storonsky, Revolut’s Chief Executive said.
With the Revolut UK license, the fintech company can expand its product and service offerings it offers clients.
Consistent Growth
Revolut started as a travel finance app in 2015. Since then, it has launched other services including kids bank accounts, business banking, share and stock trading products, insurance, and hotel and flight booking. This year, the fintech company added Revolut X, a crypto exchange platform for professional traders.
“In the world of fintech, it’s sometimes not so easy to explain what Revolut is to our customers,” Antoine Le Nel, Chief Growth Officer at Revolut said.
Currently, Revolut’s EU operations account for about 70% of its revenue, which points to the kind of offerings the fintech startup will be rolling out in the UK if it sails through the mobilization phase.
For instance, Revolut users in Ireland can deposit cash in interest-earning accounts, and access loans and credit cards. Le Nel said that Revolut plans to introduce mortgage plans in the coming year. The mortgage plans will first be tested in Lithuania this year.
Restrictions
Revolut’s banking license in the UK comes with a set of restrictions. Despite getting the license, Revolut remains on the radar of UK regulators. Previously, the PRA found the fintech’s financial audits for 2020 to be inadequate. In 2021, auditors could not verify a portion of 2021 revenue. This issue was resolved afterwards. In 2022, Revolut experienced delays in posting its accounts; its 2023 results were posted early.
With 9 million UK clients and 45 million global clients, Revolut has gotten into the mobilization phase. This phase will involve building its banking operations and strengthening its senior management team. The mobilization period lasts for about 12 months. During this period, not much will change for UK customers.
The cash that Revolut holds will be protected via the e-money safeguarding process. This means the UK’s Financial Services Compensation Scheme (FSCS) deposit protection does not apply. The FSCS provides a guaranteed compensation of $109,000 for bank failure.
