Revolut Secures UK Banking License, Marking Major Milestone in Fintech Expansion

On Thursday, July 25, Revolut, a fintech startup, announced that it had received a banking license in the United Kingdom, reports PaySpace Magazine. For the London-based company, this license is a significant milestone, allowing it to expand the range of services offered to customers. This achievement is historic for Revolut, which has been awaiting this functional expansion for three years.

The Prudential Regulation Authority of the United Kingdom granted the license to Revolut. Following this, the company plans to develop new infrastructure to support banking operations. While the exact timeline for entering this new segment is unclear, it is expected to happen in the foreseeable future.

Revolut applied for the banking license in 2021 and faced several delays, enduring a period of uncertainty about its future. Revolut's UK CEO, Francesca Carlesi, stated that obtaining the license is a major step forward for the company and its customers. She emphasized the responsibility that comes with functioning as a bank in the UK and pledged that Revolut would work tirelessly to offer products and services that improve customers' financial lives. With the banking license, Revolut can now accept customer deposits and offer products like loans and credit cards. This positions the company to compete with financial service providers such as Monzo and Starling, which also challenge traditional banks like Barclays.

One reason for the three-year wait was the need to align Revolut's share structure with Prudential Regulation Authority rules. The company resolved this issue by consolidating six classes of shares into ordinary shares, facilitated through a deal with major Japanese investor SoftBank. Revolut's improved financial performance in the past year likely influenced the decision to grant the banking license. The company reported a pre-tax profit of £438 million ($545 million) in 2023, a significant turnaround from a pre-tax loss of £25.4 million in 2022. Revenue for 2023 was £1.8 billion, a 95% year-on-year increase.

Revolut's statement highlighted that the company is now focused on mobilizing its efforts in the UK, where it has over 9 million customers. CEO Nikolay Storonsky described the license as a crucial milestone that will help Revolut become the bank of choice for UK consumers.

Revolut has experienced rapid growth over the past few years, now serving 45 million customers worldwide. The trend of consumers favoring challenger lenders with innovative apps and superior user experiences bodes well for Revolut's future in the banking sector.