Revolut submits application for a bank licence in the UK; here’s what to expect

London-based fintech startup, Revolut, has announced that it plans to create a financial super app and has submitted its application for a bank licence in the UK to the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). 

What happens if the licence is approved?

If the application goes through, Revolut will be able to provide full-service current accounts with essential products such as overdrafts, loans and deposit accounts to its customers. The company’s previous personalised products include commission-free stock trading, cryptocurrency trading, savings wallets, junior accounts, and rewards.

In addition to Revolut’s financial crime and anti-money laundering tools, on the approval of the licence customers would have the additional security of deposit protection under The Financial Services Compensation Scheme (FSCS) up to £85,000 (approx €94,305) per person.

Revolut was granted an EU banking licence in Lithuania in December 2018 and has begun rolling out banking services in central Europe. The company recently introduced a competitive credit offer in two European markets and plans to roll out banking operations across additional European markets this year. 

Speaking on the development, Nik Storonsky, founder and CEO at Revolut, says, “A UK banking licence allows us to provide the essential financial products UK customers expect from their everyday primary bank account, such as loans, credit cards, overdrafts and deposit accounts, coupled with the additional trust and security that is offered through FSCS protection.”

He further adds, “In the future, we want to offer many more innovative products to our UK customers, and we are excited to continue driving innovation and competition in the banking industry. Becoming a fully licenced bank in the UK is a central pillar of that ambition.”

Everything about Revolut

Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, Revolut is a financial services company that specialises in mobile banking, card payments, money remittance, and foreign exchange. It includes a prepaid debit card, currency exchange, and peer-to-peer payments.

One of Revolut’s key features includes conversion from one currency to another based on interbank rates with no fee. Customers can hold foreign currencies in their accounts or send money to another Revolut user or a bank account outside of their country.

According to the company, it is on a mission to help customers improve their financial health, promote financial cohesion across communities, and empower customers to have more control. Currently, it has over 13 million customers around the world who use Revolut’s products to make more than 100 million transactions a month.

Recent growth and developments

In December 2020, the company launched its online web app for its customers in the European Economic Area (EEA), Australia, Canada, Singapore, Switzerland, Japan and the US. This development was made for customers so that they can safely access their accounts from a browser on desktop or laptop, in addition to the smartphone app.

In the same month (Dec 2020), Revolut had announced the launch of ‘Pockets’ – a new feature that enables customers to stay on top of their spending as well as makes organising rent, bills, and subscriptions effortless.

Prior to that in October 2020, former Standard Chartered European CEO, Richard Holmes joined Revolut as an advisor to the board with an aim to develop Revolut’s bank proposition. His responsibilities include developing the board and leadership team for the new entity.

In July 2020, Revolut closed its Series D round with an $80M (approx €65.8M) extension, for a total of $580M (approx €477M) at a $5.5B (approx €4.52B) valuation, despite the fallout from the pandemic. In February 2020, the company announced its funding of €460M in its Series D round led by US-based growth capital firm TCV along with support from existing investors. The company has raised overall funding of about €769M, to date. In addition, the round positioned Revolut among the highest valued fintechs in the world with a valuation of nearly €5B.