Revolut has announced that it has received its UK banking licence with restrictions from the Prudential Regulation Authority (PRA), the regulator responsible for overseeing the UK banking sector.
Revolut now enters the ‘mobilisation’ stage, sometimes referred to as ‘Authorisation with Restrictions’, a common step for many new banks in the UK.
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By GlobalDataNothing changes for UK customers during this restricted period, which is to allow new banks like Revolut to complete the build out of their UK banking operations ahead of launching in the market.
Until then, UK customers can continue to use their Revolut e-money account as they always have
This confirmation is something that Revolut has been hoping and anticipating for some time. Revolut recently registered record profits for 2023, but it was the hope for the confirmation of this licence that became the main headline.
As previously reported on RBI, the announcement of the banking licence was viewed as a delay and not whether or not is was coming.
Revolut will be prepared for this confirmation, having already begun its transition into its new London headquarters, located in Canary Wharf.
Nik Storonsky, CEO of Revolut, commented: “We are incredibly proud to reach this important milestone in the journey of the company and we will ensure we deliver on making Revolut the bank of choice for UK customers.”
Francesca Carlesi, UK CEO of Revolut, added: “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.”
Benjamin Hatton, Banking and Payments Analyst at GlobalData, publisher of RBI, said: “Revolut has been seeking a banking license in the UK for several years now. Having finally allayed concerns over several facets of its global organisation, the bank will be looking to kick on in other jurisdictions as part of its global expansion strategy. This announcement comes at a perfect time for Revolut, with reports the bank is planning a share sale valuing the company at over $40bn. With the extra weight of a full UK license behind it, Revolut may be able to justify being labelled as one of the most valuable fintechs in the world.
“With Revolut now able to take customer deposits, the fintech will likely look to break into new revenue channels, particularly lending streams which are a particularly fruitful endeavour for banks at the moment. It is unlikely to be all plain sailing, though, as extra regulatory hurdles and deposit protection measures will also weigh up against the bank’s future targets.
“Revolut will hope it can catch up with other leading fintechs in the UK, including Monzo and Starling, which are beginning to become real contenders within the UK banking space. Over 3% of UK consumers consider one of the two fintechs to be their main bank, according to GlobalData’s 2024 Financial Services Consumer Survey. Further competition in the market is no bad thing, driving improvements in competitors which are now challenged with competing with yet another digital innovator. Having established itself across several leading markets around the world in recent years, including Europe, Mexico, New Zealand, and the US, Revolut promises to become the global player it has promised for so long.”
