Revolut, a popular payment app, has spent the last several years trying to secure a UK banking license. However, due to certain regulatory concerns, the company encountered a number of challenges and setbacks. This finally changed yesterday, July 25, when the fintech reported that its long-term quest to gain a banking license in the UK is over.
Why did Revolut get its license now?
The firm was granted a license with restrictions by the Prudential Regulatory Authority. Initially, the UK authorities were hesitant to grant it due to issues over compliance that they detected while researching Revolut’s service.
The company failed to file accounts on time, and the size of its business alone, which features over 42 million customers around the world, was another concern. However, three years since Revolut started applying for the license, it finally received it.
The firm finally saw success as regulatory fears have been eased by the recent bumper revenues of more than $2.2 billion, as seen in 2023. Revolut saw record profits before tax of $545 million.
Furthermore, last October, Revolut went through a process of simplifying its share ownership. To make matters simpler, it collapsed its six classes of shares into a single one, which significantly clarified its ownership structure. This allowed the UK regulators to understand it better, and it became a strong factor in favor of the company getting its license.
What is next for Revolut?
Now, Revolut finds itself in the mobilization stage, which is often referred to as Authorization With Restrictions. This is a common step that banks in the UK go through while they wait to receive full authorization. During this time, Revolut will be able to build up its deposit base and start offering official banking products, such as credit cards, mortgages, and loans.
Of course, it will keep its existing services, but this will also make it into a threat to the established hegemony.
Commenting on the new development, Revolut’s CEO, Nik Storonsky, said that the fintech and its team are incredibly proud to reach this major milestone in their journey. He added that Revolut will ensure that it delivers on becoming a bank of choice for the UK customers.
Meanwhile, the CEO of Revolut’s UK branch, Francesca Carlesi, said: “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.”
