Revolut seeks a UK banking licence

Darren Sinden

Revolut has been used by more than 12.0 million individual customers and 500k business customers according to the group’s website

Open a bank account directly with a central bank

Revolut, the currency exchange and payments platform has set its sights on disrupting another sector within financial services, with an application for a UK banking licence.

If the application is granted the app would be able to offer its clients full-service current accounts, pay interest on balances and market other products to customers such as deposit accounts, overdraft facilities and loans.

Revolut has been used by more than 12 million individual customers and 500,000 business customers according to the group’s website.

A UK banking licence would theoretically turn the business into a genuine challenger bank and would also provide eligible customers with the protection of the UK Financial Services Compensation Scheme (FSCS) which insures up to £85,000 of customers deposits against fraud or business failure.

Revolut secured a Lithuanian banking licence bank in 2018 but becoming a UK bank would be a notable milestone. The Lithuanian banking status has allowed Revolut to test the water in European markets for new banking products, which we assume it would ramp up as and when it receives UK permissions.

Becoming a UK bank is also likely to significantly enhance Revolut’s valuation. Back in July 2020, the fintech raised $80 million as part of a larger Series D funding round, that valued the business at $5.50 billion.

At the time Revolut said it would use the new cash to build out its European banking offer and to add new features to its US operations.

In the UK Revolut launched a new subscription service last month called Revolut Plus which offered purchase protection insurance on card purchases and refunds on tickets for events that customers couldn’t attend for a monthly fee of £2.99.

The launch was seen as a way to try and attract new customers to the brand, who were concerned about online transactions during the pandemic. Revolut also recently secured a temporary crypto currency registration from the UK FCA which was necessary as UK regulators are scrutinising the way that financial services businesses apply anti-money laundering regulations to cryptocurrency transactions and payments.

The temporary licence, which was granted because of a backlog of unprocessed applications at the UK regulator, will expire in July.

Speaking about the application for a banking licence Nik Stronsky, Revolut’s CEO said: “We want to be the best in class for customer experience, value and capabilities, and offering full bank accounts allows us to do just that” and that “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.”

Last week one of Revolut’s US fintech peers, SoFi, which itself had applied for US banking charter back in October, announced it would go public via a SPAC, in a deal that would value the business at around $8.50 billion.

No doubt Revolut’s management and VC backers will be watching that transaction very closely indeed from here on in.

Read this next

Digital Assets

Binance US weighs plans to go public, CEO CZ says

Binance.US, the American outpost of the world’s biggest crypto exchange, has seemingly plans to follow Coinbase’s path and go public one day.

Retail FX

FX volumes, number of active clients boom at Exness in June 2021

The latest group of retail FX platforms to report their monthly volumes indicate that June was a busier month all round, with Exness setting its second-highest monthly volumes on record.

Industry News

Individuals impersonating CySEC representatives draw warning from Cyprus watchdog

The Cyprus financial watchdog said on Friday there was evidence of fraudulent impersonation of its officials who are engaged with firms under CySEC’s supervision.

Digital Assets, Inside View

SEC v. Ripple angers XRP holders as rival Stellar (XLM) mixed in “love triangle” over MoneyGram

“Although the SEC claims that all XRP are unregistered securities and Brad Garlinghouse and Chris Larsen unjustly enriched themselves, it allows Ripple Co-founder JedMcCaleb to sell his XRP for hundreds of millions of dollars to possibly buy MoneyGram. Makes perfect sense”, said XRP Holders’ attorney John Denton ironically.

Industry News

Monex loses second appeal in CFTC anti-fraud enforcement action

Since Dodd-Frank that such trading must be conducted on a regulated exchange, and that the offeror must be registered with the CFTC.

Technology

Profile Software announces automated custody platform and mobile tech

The upgraded version of Axia Custody offers advanced functionality for multi-custodian operations across borders for a competitive multi-channel international-level client experience.

Industry News, Institutional FX

IHS Markit to pay CME Group $113m amid EU approval of post-trade JV

IHS Markik, at the same time, is being acquired by S&P Global Inc for $44 billion in stock, subject to approval as well.

Digital Assets

India’s Central Bank working towards implemention of digital currency

The Deputy Governor of the Reserve Bank of India, T Rabi Sankar, has said that the central bank was working towards a phased implementation of a central bank digital currency and is in the process of introducing it for wholesale and retail segments shortly.

Industry News

Visa acquires Currencycloud to facilitate global funds movement

Visa has announced the acquisition of Currencycloud, which provides APIs which help institutions with remittance and currency exchange capabilities in a deal that is valued at $963 million.