LONDON, March 11 (Reuters) - Britain's Revolut said on Wednesday it had received regulatory approval for a full UK banking licence, ending a years-long wait for the financial technology firm to start
Revolut gets full UK banking licence after years-long wait
Revolut's UK Banking Licence Approval and Market Impact
By Tommy Reggiori Wilkes and Elizabeth Howcroft
LONDON, March 11 (Reuters) - Revolut, Europe's most valuable start-up, said on Wednesday it had received regulatory approval to launch a British bank, allowing it to compete head-to-head with high street lenders in areas such as current accounts and consumer lending.
The London-based financial services firm, which has amassed 13 million customers in Britain but no physical branches since it was founded just over a decade ago, was granted a banking licence with restrictions in July 2024 after a three-year wait.
Leadership Perspective
Nik Storonsky, Revolut's co-founder and CEO, has said getting a licence in its home market was his top priority.
Regulatory Approval Details
Revolut said in a statement on Wednesday that the Bank of England's Prudential Regulation Authority had allowed it to end its "mobilisation" phase, which had lasted for longer than the usual 12-month limit.
This allows Revolut to offer protected deposit accounts and "paves the way for a wider range of services in future, including lending and other products", the company added.
Competition with Incumbent Banks
Revolut will now take on Britain's incumbent banks including Barclays, Lloyds and NatWest and said it expects to start rolling out current accounts to new clients "in a few days".
It predicted the process of moving customers to the new bank to take "a few months in total".
Strategic Importance
"Launching our UK bank has been a long-term strategic priority for Revolut, and marks a significant moment in our journey. The UK is our home market and central to our growth," Storonsky said.
Revolut's Rapid Growth
Global Expansion
Founded in 2015, Revolut has grown rapidly around the world in the last decade, with more than 65 million customers globally and a $75 billion private market valuation.
Customer Acquisition Strategy
Its strategy has been to attract customers who use it as a secondary bank account for services including payments and foreign exchange transactions, then offer them perks like subscriptions, Revolut's outgoing U.S. CEO said last week.
Profit Drivers
A crypto boom helped its profit in 2024.
Customer Deposit Trends
Despite its growth, analysts say average customer deposits at Revolut are lower than at traditional banks, and executives have said too few use it as their primary account.
International Licensing and Regulatory Challenges
Licences in Other Markets
Revolut already has a banking licence in Lithuania, which it uses as a "passport" into the European Union, and is seeking a licence in France.
It has also applied for a U.S. bank charter.
Industry and Analyst Reactions
"The full licence will open the door to balance sheet driven products and sharpen pressure on both traditional banks and the cohort of challenger banks," Elliot Reader, Director in Houlihan Lokey’s FinTech Group, said of the UK development.
Mobilisation Process and Regulatory Concerns
A spokesperson for Revolut said the slower-than-expected mobilisation process was due to its larger size.
The Financial Times previously reported that the licence was held up over regulators' concerns over whether its risk controls can keep pace with the rapid growth of its overseas operations.
(Reporting by Tommy Reggiori Wilkes and Elizabeth Howcroft; Editing by Alexander Smith)
