Revolut banking licence: A fintech milestone

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Revolut has secured a UK banking licence, albeit one with “restrictions”, more than three years after it lodged an application with regulators. 

The news is a milestone for the company, which faced difficulties convincing regulators it should be given a licence after a number of accounting and reputational issues. The firm has delayed filing of accounts, breached EU regulations and been the subject of allegations over its working environment. 

Nevertheless, the company is a darling of the UK fintech scene. It is Britain’s most valuable fintech, most recently valued at £14bn, although its valuation has fluctuated a lot in the past few years. Nikolay Storonsky and Revolut are in third position on our Great British Billion-Pound Businesses list, which was published in the July/August issue of Business Leader. 

Storonsky, who was born in Russia but came to the UK when he was 20, set up Revolut in 2015. Its app-based payments service undercuts mainstream banks with services such as fee-free foreign exchange. It now operates across 160 countries and has more than 45 million customers. Our list valued the company at £14bn, but a secondary-share sale could value the firm at a figure as high as $45bn (£35bn), according to the Wall Street Journal.

The UK licence will allow the company to hold customer deposits, meaning it can offer own-brand loans and mortgages. That is a key step in its aim to move from being an intermediary between consumers and licensed banks to a bank in its own right. 

It will also help its growth. The company had a licence in Europe from the Bank of Lithuania but its lack of full authorisation was a brake on its growth ambitions, both in the UK and overseas. Approval from UK regulators makes it more likely that regulators in other markets, particularly the US, will follow suit.

The company generated £1.8bn in revenues last year and was profitable, delivering a pre-tax profit of £437.8m. 

Storonsky says: “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.”

Now that it has secured a licence, it can start what is termed mobilisation, meaning it will invest in building the systems needed to operate under a full licence and address any issues identified by the regulator. This process usually takes new banks around a year to go through.

Revolut is one of a wave of fintech firms that have received a banking licence since 2013. Some 37 “start-up” banks have been authorised by the Prudential Regulation Authority since 2013, including Monzo Bank, OakNorth Bank, Atom Bank and Starling Bank. 

These fintechs have been taking on the incumbents in the industry across sectors as diverse as business finance, current accounts, mortgages and loans. More than two-thirds (36 per cent) had a digital-only bank account in 2024, up from 24 per cent at the start of 2023, according to data from Finder.

Business Question

Who am I?

• I co-founded a business lender in 2010 and served as CEO until 2021
• It was originally set up as a peer-to-peer lending marketplace and listed on the LSE in 2018
• I was awarded a CBE in 2015
• I founded an online payments fintech in 2022

The answer can be found at the bottom of the page.

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