Revolut, the global fintech boasting over nine million UK customers, has officially obtained its UK banking licence from the Prudential Regulation Authority (PRA), more than three years after its initial application.
After securing the UK banking licence, Revolut should be able to eventually offer a far wider range of products and services to customers, including mortgages and loans.
Now, Revolut enters a restricted period, known as the ‘mobilisation’ stage, in which it can complete the build-out of its UK banking operations before fully launching in the market. During this stage, Revolut can only hold £50,000 of total customer deposits. New and existing UK customers will still be able to use their Revolut e-money account as previously.
Revolut will now focus on making itself the “bank of choice” for customers in the UK, says CEO Nik Storonsky.
The PRA, the regulator responsible for overseeing the UK banking sector, says that banking licences are typically granted within 12 months of an application. However, having first for one in 2021, Revolut faced a number of roadblocks before it achieved approval – a major one being delays to its 2021 and 2022 accounts.
Francesca Carlesi, UK CEO of Revolut, commented: “Today’s announcement is a significant step forward for Revolut and for our customers. It is a tremendous responsibility to be a bank in the UK and we will work relentlessly to offer products and services that improve the financial lives of everyone who uses Revolut. This is the next phase in Revolut’s journey in the UK – we can’t wait to get going.”
Earlier this month, Revolut published its Annual Report for 2023, revealing that it had achieved net profitability for three years in a row – with Group revenue increasing by 95 per cent from $1.1billion (£0.92billion) in 2022 to $2.2billion (£1.80billion).
Increased competition and choice is ‘good news’
For Russell Gous, editor-in-chief at money transfer comparison site TopMoneyCompare, Revolut’s banking licence success “can only be good news for UK customers”.
“Revolut made its name by offering innovative financial services, including low-fee international money transfers, but has grown to become one of the most successful fintech companies around.
“Their inability to obtain a licence had become a cause for concern, with issues around account filing and auditors struggling to verify revenue figures not helping. Hopefully, this news should lift what was becoming a bit of a dark cloud over the company. Failure to get a licence would’ve been a real setback and meant a total rethink of their future growth strategy.
“This news means we could soon see Revolut enter the world of credit cards, mortgages, and loans. Revolut customers will also become eligible under the Financial Services Compensation Scheme, protecting their deposits up to £85,000. The hope is these new products will offer real competition and choice for consumers and the growth of their already nine million UK customers.”
