The Hold-Up on Revolut’s UK Banking License: Risk-Control Worries

UK regulators are holding up Revolut’s full banking license amid concerns that the fintech firm’s risk controls are not scaling fast enough with its rapid overseas growth, the Financial Times reported.

Officials at the Bank of England have sought assurances that Revolut will bolster its risk-management infrastructure to match its international ambitions. The Prudential Regulation Authority (PRA), Revolut’s lead supervisor, is scrutinizing controls spanning anti–money laundering, IT resiliency and capital before allowing the London-based start-up to operate as a full-fledged UK bank, the FT said.

Revolut was granted authorization to enter a “mobilization phase” in July 2024 after a three-year tussle but remains subject to tight limits, including a cap of just £50,000 in total deposits for its UK banking entity until full approval is secured from the PRA and Financial Conduct Authority.

In typical cases, the PRA expects mobilization efforts to last 12 months, yet Revolut has already been in the process for more than 14 months, the FT said.

Two people familiar with the talks told the news outlet that the PRA is mindful that granting a full UK license could spur a cascade of approvals in other jurisdictions that look to London as a reference point.

Revolut, which last month unveiled a new Canary Wharf headquarters, has outlined plans to expand into 30 additional countries by the end of the decade and to reach 100 million customers, the newspaper said.

While it awaits full accreditation in its home market, Revolut already operates with a banking license in the EU via Lithuania’s central bank and in Mexico. Colombian authorities this month cleared it to set up a bank pending further approvals. In the US, Revolut is exploring the purchase of a bank to obtain a national charter and lend across all 50 states.