Financial technology firm Revolut has achieved a significant milestone by securing a UK banking license, ending a prolonged three-year wait. This new license alleviates regulatory uncertainties that had previously constrained the company’s expansion in Britain.
As one of the leading fintech firms that have emerged in the UK over the past decade, Revolut offers financial services without physical branches, leveraging digital platforms to cater to its customers.
The acquisition of the UK banking license represents a crucial step towards Revolut’s broader goals, including a potential stock market listing. This progress follows previous challenges the company faced during its application process, particularly concerning internal accounting practices.
With over nine million customers in the UK and a global user base of 40 million, Revolut is now positioned to compete more directly with traditional banks by obtaining similar regulatory permissions.
Revolut Has Obtained a UK Banking License, Paving the Way For Growth and a Possible Stock Market Listing
Revolut has entered a “mobilisation” phase as part of the regulatory process, allowing it to further develop its UK banking operations before fully launching its services.
This 12-month phase involves demonstrating operational readiness, addressing regulatory concerns, and building out infrastructure, including securing investment and enhancing IT systems. However, there are restrictions on the total amount of deposits that can be accepted during this period.
Founded in 2015 by Nik Storonsky, Revolut has quickly grown into Europe’s most valuable startup by offering a range of services, from payments and loans to trading stocks and cryptocurrencies.
Despite its rapid growth, the company has faced regulatory scrutiny and delays in publishing full-year accounts due to issues with internal accounting. The firm’s auditor raised concerns about verifying revenue in its 2021 accounts.
Recently, Revolut’s interim CFO reported improvements in internal controls, and the company has demonstrated financial success with a record pre-tax profit of £438 million for 2023.
This performance, combined with strong user growth and rising interest income, positions Revolut favorably for a planned share sale that could value the company at over $40 billion. CEO Nik Storonsky views the license as a key milestone in making Revolut the preferred banking choice for UK customers.
