Revolut Receives UK Banking Licence
After a three-year wait, the UK fintech company has finally received approval to move forward towards obtaining their full licence.
Revolut, the British digital bank, has officially secured a banking licence from the Prudential Regulation Authority (PRA) in the United Kingdom following a lengthy three-year process.
This milestone means that the London-based fintech giant will soon have the capability to hold customer deposits and offer various lending products such as credit cards, personal loans, and mortgages.
Revolut announced on Thursday that they have entered the PRA’s “mobilisation” stage, which involves a 12-month period of operating under certain restrictions to demonstrate readiness for full operation as a UK bank.
During this mobilisation phase, Revolut can currently only hold up to £50,000 of total customer deposits and has limitations on introducing certain new services.
This transitional period is a standard industry process, with other new banks like Monzo, Starling, Atom Bank, Zopa Bank, GB Bank, and Kroo having gone through similar stages.
Nik Storonsky, CEO of Revolut, expressed his pride and noted that this achievement marks a significant step forward for the company in becoming the preferred bank for UK customers.
Significant Step Forward
Established in 2015, Revolut has seen substantial growth by offering customers simple accounts, competitive foreign exchange rates, and a globally accepted debit card that allows cash withdrawals in over 120 countries.
The company also provides a premium app service with features like overseas medical insurance and the ability to trade stocks and cryptocurrencies like Bitcoin and Ethereum.
Revolut’s entry into the fully licensed banking sector is expected to disrupt the UK’s financial services industry landscape, pushing traditional banks to hasten their digital transformation efforts.
The official banking licence for Revolut is good news for consumers, potentially leading to enhanced market competition in credit card rates and loan offerings.
Francesca Carlesi, UK CEO of Revolut, emphasized the responsibility that comes with being a bank in the UK and pledged to deliver products and services that enhance the financial well-being of Revolut’s users.
“This marks the next chapter in Revolut’s journey in the UK—we are eager to move forward,” Carlesi added.
Record Profits
Earlier this month, Revolut announced record profits, with a pre-tax profit of £438 million in the previous year, up from a loss of £25 million in 2022, and a nearly doubled revenue of £1.8 billion.
The e-bank has expanded aggressively, opening offices in new countries such as Brazil and New Zealand in 2023. With nine million customers in the UK and over 45 million globally, Revolut has outpaced competitors like Monzo and Starling, who have roughly nine million and three million customers, respectively.
Unlike its competitors, Revolut was unable to offer lending products without a UK banking licence. However, the company already holds a European banking licence, enabling it to provide personal loans in certain European countries and credit cards in others.
Revolut initially applied for a UK banking licence in 2021 and has now successfully obtained it, positioning the company for further growth and expansion in the financial services sector.
PA Media contributed to this report.
