Revolut has said it no longer needs “good reason” to shut down customer accounts as Britain’s most valuable fintech tightens its security policies in the wake of receiving a banking licence.
In a terms and conditions update sent to some account holders and seen by UKTN, the bank told customers that should it wish to shut their account, “we’ve clarified that we only need ‘reason’ – not ‘good reason’ [to do so], as previously stated.”
The move is one of a number of policy changes being introduced at the $45bn fintech as it adapts to a wave of fresh regulation as part of its transition to a fully-fledged bank following a decision by UK regulators to grant it a licence in July.
The firm told UKTN the account closure change was made to align with industry standards.
Banks’ ability to control whether consumers may hold accounts became the subject of fierce debate last year following complaints from Reform UK leader, now MP for Clacton, Nigel Farage.
Farage claimed a decision to shut his account at Coutts was politically motivated. The backlash sparked an internal investigation into the matter. It found there was insufficient evidence that Farage’s account was closed due to political beliefs — but the storm ultimately led to the departure of NatWest chief Alison Rose.
The Financial Conduct Authority (FCA) also began its own probe into debanking, and urged Britain’s biggest high street banks to ensure they did not unfairly close user accounts.
“The time is also right for a debate on how we balance access to bank accounts with the threat of financial crime, as well as firms’ reasonable risk and commercial appetites,” the FCA said.
“An important question for policymakers is whether all individuals, businesses and organisations should have the right to an account, as is the case in some other countries.”
A 2024 report from the Institute of Economic Affairs described a “debanking epidemic” in which tens of thousands of accounts were being closed because banks could not prove that customers were not involved in financial crime, following the implementation of new anti-money laundering rules in 2017.
In July, Revolut ended a painful three-year wait when it was awarded a banking licence by the Bank of England, amid speculation its application was going to be turned down. It is currently in the ‘mobilisation’ stage before obtaining a full banking licence, during which time banks can only hold £50,000 of total customer deposits. According to the Bank of England, mobilisation “could take as little as a few months but cannot continue indefinitely and should take no longer than 12 months.” Revolut had already obtained a banking licence in Lithuania in December 2021 and is also regulated by the European Central Bank.
Read more: Revolut finally gets its banking licence. What’s next?
The firm last month cemented its status as Britain’s most valuable fintech, after a secondary share sale by employees valued the company at $45bn.
The London-based business, which recently celebrated its ninth anniversary and will soon move into a huge new Canary Wharf office, recorded a £344m profit for 2023, compared to £6 million the previous year, while revenues nearly doubled to £1.8 billion. Rising interest rates added an extra £400 million in interest income during the year, as well as a more-than 50% jump in customer subscription income to £250 million.
