Revolut UK Banking License Delay: Risk Management Concerns

Revolut's U.K. Banking License Faces Delays

Revolut, a U.K.-based fintech company, is experiencing further obstacles in its pursuit of a full banking license within its home country. Concerns regarding the maintenance of robust risk management controls amidst its rapid global expansion are reportedly causing the delay, according to the Financial Times.

Bank of England's Scrutiny

The Bank of England is requesting that Revolut demonstrate a commitment to developing a risk management infrastructure that aligns with its international growth trajectory. Regulators are currently evaluating the fintech’s control systems both within the U.K. and across its international operations.

Mobilization Phase and Restrictions

Although Revolut received preliminary approval for a banking license over a year ago, it remains in the “mobilization” phase. This period, typically lasting 12 months, involves limitations on deposit amounts while the Prudential Regulation Authority and Financial Conduct Authority assess the company’s readiness for full banking operations.

Significance of a Full License

Securing a full banking license would enable Revolut to initiate lending services in the U.K. and accept customer deposits exceeding £50,000. Currently, the company serves 12 million customers within the U.K.

Global Expansion and Ambitions

The news of the delay coincides with Revolut’s aggressive expansion beyond the British market. With a global customer base exceeding 65 million, the company already holds a banking license in the European Union.

• It operates in Australia, Japan, New Zealand, Singapore, Brazil, and the U.S.
• Recent launches include India, with planned operations in Colombia by 2026.
• Further expansion is envisioned for Argentina, Mexico, and Africa (starting with South Africa).
• Revolut also possesses an in-principal payments license in the UAE.

Future Growth Targets

Revolut has articulated ambitious growth targets, aiming to reach 100 million customers by mid-2027. The company also intends to enter more than 30 new markets by 2030.

Revolut's Response

A Revolut spokesperson stated via email that the company is “progressing through the final stages of mobilization and continue to work constructively with the PRA.” They acknowledged the complexity of the process, emphasizing that thoroughness is prioritized over speed.

Financial Performance

According to its latest annual report, Revolut reported a net profit of $1 billion (£790 million) in 2024. Revenues experienced a substantial 72% increase, reaching $4 billion (£3.1 billion) during the same period.

The company’s crypto exchange, Revolut X, within its Wealth division, saw a significant revenue surge of 298%, climbing from $158 million in 2023 to $647 million in 2024.