UK Banking License Granted to Revolut After Long Wait

Revolut, the UK’s most valuable fintech company, has achieved a significant milestone by securing a UK banking licence, a process that has spanned over three years since its initial application. The Prudential Regulation Authority (PRA), responsible for supervising the UK banking sector, has granted Revolut the licence with certain restrictions.

Nik Storonsky, Revolut’s CEO, celebrated the receipt of the UK banking licence as a pivotal milestone for the company. The acquisition of this licence is significant because it enables Revolut to hold customer deposits, which marks a major expansion of its financial services capabilities. With this new authorisation, Revolut can now offer a broader range of banking services, including lending and mortgage products, directly to UK consumers. This development not only opens up new revenue streams for Revolut but also enhances its competitive edge in the UK market.

The UK banking licence also provides an important layer of customer protection, as it ensures that Revolut’s customers will benefit from the same deposit protection schemes as traditional banks. This assurance of safety and security is a key factor in building trust and credibility with users.

Moreover, this achievement helps address long-standing questions and concerns about whether Revolut would ever secure the necessary regulatory approvals, thereby removing a significant hurdle for the company. As Revolut integrates its new banking operations into its existing platform, it will be better positioned to leverage its substantial customer base and recent record profits to drive further growth and innovation in the UK financial services market.

The licence will also alleviate concerns that have loomed over Revolut regarding its ability to secure regulatory approval. With over 45 million customers, the company has been under scrutiny for its regulatory compliance and corporate culture, which have been factors contributing to the prolonged approval process.

The current phase for Revolut is known as the "mobilisation stage," a common procedure for new banks in the UK. During this phase, Revolut will operate with a £50,000 cap on total customer deposits while it expands its UK banking operations and prepares for a full-scale launch. In addition to its recent UK achievement, Revolut holds a banking licence in Lithuania, which permits it to lend across the European Union. Despite the usual timeframe for obtaining a UK banking licence being as short as 12 months, Revolut’s journey was extended due to regulatory concerns about account management and corporate practices.

With the UK banking licence now secured, Revolut is poised to strengthen its position within the UK market. The company plans to leverage its recent record profits and its expansive customer base, which exceeds 45 million globally, to drive its next phase of growth.

The focus will shift to rolling out its UK banking operations, which involves integrating the new banking services into its already robust platform. This transition marks a significant milestone for Revolut, allowing it to offer a wider range of financial products, including the potential for lucrative lending and mortgage services. The ability to hold customer deposits and provide official bank deposit protection will enhance its competitiveness in the UK financial sector.

The licence also provides Revolut with an opportunity to address previous regulatory concerns and cement its reputation as a major player in the banking and fintech space. By expanding its services and improving customer offerings, Revolut aims to attract more users and retain existing ones, ultimately positioning itself as a leading provider of comprehensive financial solutions in the UK.