Revolut Secures Highly Anticipated Banking License in the UK

Revolut, the London-based financial technology firm, has successfully obtained a banking license from the United Kingdom’s Prudential Regulation Authority (PRA), marking a critical achievement. This accomplishment comes after efforts to secure the license began earnestly in 2021.

Globally, Revolut has amassed a customer base of 45 million, with its most significant segment, comprising 9 million clients, residing in its domestic U.K. market. The company boasts a broader array of products and services in the U.K. than in many other regions.

Already licensed as a bank within the European Union, Revolut gained its license through the assistance of the Bank of Lithuania in 2018. This has enabled the company to leverage European passporting rights to expand services across other EU nations.

However, the situation in the U.K. presented challenges, as the absence of a local banking license impeded Revolut’s ability to offer a full suite of credit services, such as personal loans and credit cards, and to have greater control over its operations.

Nik Storonsky, Revolut’s co-founder and CEO, expressed immense pride in achieving this significant milestone, emphasizing the company’s commitment to becoming the preferred banking choice for customers in the U.K.

Revolut’s clientele won’t see immediate changes, as the PRA authorization comes with specific limitations, transitioning the company into what is known as the “mobilisation” phase—a stage familiar to other neobanks like Monzo and Starling.

During this initial phase, which the Bank of England outlines as lasting no more than 12 months, the primary constraint is the £50,000 cap on total customer deposits the bank can hold.

A subsidiary of Revolut Group Holdings Ltd has been the recipient of the PRA’s banking license, indicating no immediate plans to migrate U.K.-based customers to this new entity. Instead, the firm will continue as an e-money institution under the regulation of the Financial Conduct Authority.

Revolut’s recent annual report showcased an impressive financial performance, with revenues reaching $2.2 billion (£1.8 billion) and a pre-tax profit of $545 million (£438 million) in 2023. This marks a notable period as the company discloses its audited annual results timely, reflecting its maturation and commitment to transparency, likely influencing the PRA’s favorable decision.