Revolut, the London-based financial services firm, has received regulatory approval to launch a British bank. This allows it to compete directly with established high street lenders in areas such as current accounts and consumer lending. Founded in 2015, Revolut has amassed 13 million customers in Britain without physical branches and boasts more than 65 million customers globally. The company is valued at $75 billion. Revolut provides financial services including payments and foreign exchange transactions.
After a three-year wait, the Bank of England’s Prudential Regulation Authority has allowed Revolut to end its “mobilisation” phase, which lasted longer than the usual 12-month limit. This allows Revolut to offer protected deposit accounts and paves the way for a wider range of services, including lending. Revolut already has a banking licence in Lithuania, used as a “passport” into the European Union, and is seeking a licence in France and has applied for a U.S. bank charter.
Revolut will now compete with major UK banks, including Barclays, Lloyds, and NatWest, and expects to start rolling out current accounts to new clients imminently. The process of moving existing customers to the new bank is predicted to take a few months. Nik Storonsky, Revolut’s co-founder and CEO, emphasised that obtaining a UK licence was a top priority, marking a significant moment for the company in its home market.
Elliot Reader, Director in Houlihan Lokey’s FinTech Group, noted that the full licence would enable balance sheet driven products, increasing pressure on traditional and challenger banks. A Revolut spokesperson attributed the slower mobilisation process to the company’s size. Concerns had previously been raised by regulators about whether Revolut’s risk controls could keep pace with its rapid overseas growth.
