Revolut has secured a UK banking licence – with “restrictions” – more than three years after Britain’s most valuable fintech firm lodged its application with regulators.
It is a milestone for the company, though it may still be some time before it can hold its customers’ deposits.
Tentative approval from the Bank of England means Revolut is in the mobilisation stage, where it will build its banking operations before a formal launch.
Revolut waited years for approval, having lodged its application for a UK banking licence in 2021. The challenge, in part, had been convincing regulators that Revolut has addressed a number of accounting and reputational concerns in recent years, after EU regulatory breaches, questions over its corporate culture and the late filing of its accounts.
A UK banking licence is a key step in accelerating Revolut’s growth, as it moves the company on from its current status as an e-money firm that operates as intermediary between consumers and licensed banks.
A UK licence will allow it to hold customer deposits, opening the door to new income streams, since it can start funding own-branded loans and mortgages. However, it will also face more stringent regulations and have to guarantee customer deposits up to £85,000.
Approval by UK regulators is likely to persuade regulators in other key countries, such as the US, to follow suit.
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Revolut’s founder, the former Lehman Brothers trader Nik Storonsky, said: “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.”
