Revolut, the London-based fintech company, has achieved a significant milestone by obtaining a banking license from the Prudential Regulation Authority (PRA) in the UK. This achievement is particularly noteworthy because Revolut has been actively pursuing this license since 2021.
With a customer base of 45 million worldwide, Revolut considers its home market in the UK to be of utmost importance, with 9 million clients. In fact, the company offers a wider range of products and services in the UK compared to other markets.
While Revolut already holds a banking license in the European Union, courtesy of the Bank of Lithuania in 2018, operating in its home country has been a different story. Not having a banking license in the UK has limited Revolut’s ability to offer credit products and exert greater control over its infrastructure.
Revolut’s co-founder and CEO, Nik Storonsky, expressed pride in reaching this significant milestone. He stated that the company aims to make Revolut the bank of choice for UK customers.
However, customers should not expect immediate changes. The PRA has granted an authorization to Revolut with certain restrictions, and the company is now entering the “mobilization” stage. Similar challenger banks like Monzo and Starline have gone through this process before. The mobilization phase typically lasts a few months but should not exceed 12 months. One crucial restriction during this stage is that Revolut cannot hold more than £50,000 in total customer deposits.
It’s worth noting that the PRA has granted a license to a subsidiary of Revolut Group Holdings Ltd. As a result, the company will not immediately transfer its UK-based customers to this new subsidiary. Instead, Revolut will continue operating as an e-money institution regulated by the Financial Conduct Authority.
In its latest annual report, Revolut revealed impressive financial figures. The company reported $2.2 billion in revenue in 2023 (£1.8 billion) and generated $545 million in pre-tax profit (£438 million). Importantly, this was the first time in three years that Revolut published its audited annual results before the deadline. This increased transparency and financial stability likely contributed to the PRA’s decision to grant the banking license.
Overall, Revolut’s achievement of a UK banking license represents a significant step forward for the company. With its growing customer base and commitment to transparency, Revolut is well-positioned to solidify its position as the bank of choice for UK customers.