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

Metaverse Gaming NFT

DCentral Miami brings together all of Web3, NFT, DeFi, Metaverse

The world’s biggest Web3 meeting entitled DCENTRAL Miami is set to take place November 28-29, featuring a lineup of some of the biggest and most influential names in the blockchain space.

Digital Assets

Crypto ban expands across UK banks as Starling joins ‎crackdown

UK digital bank Starling has banned ‎all customer payments related to cryptocurrencies, another blow for the crypto traders ‎who recently saw a sizable number of banks deciding not to ‎finance the wobbly asset class.‎

Interviews

Markets Direct at FIA EXPO 2022: Traders know what they want from brokers

The FIA Expo 2022, one of the most prestigious events within the global derivatives trading industry, took place in Chicago on 14 & 15 November.

Interviews

FIA Expo 2022: TNS addresses public cloud limitations with hybrid infrastructure

November is the month of the FIA Expo, one of the largest futures and options conferences in the world, bringing together regulators, exchanges, software vendors, and brokers in one place: the Sheraton Grand Chicago Riverwalk. 

Retail FX

Italy’s regulator blacks out Finance CapitalFX, MFCapitalFX

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

Suspected leader of Honk Kong ramp-and-dump scam appears in court

A leader of a sophisticated ramp-and-dump scheme made his first court appearance in a Hong Kong court today, charged with market manipulation and various criminal offences. The case stems from an earlier joint operation of Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), and the local police. 

Institutional FX

Cboe’s James Arrante discusses growing demand for fixed income, FX algo

We caught up with James Arrante, senior director of FX & US treasuries product and business management at Cboe Global Markets, to uncover emerging trends in the FX and fixed income markets and learn more about the bourse operator’s recent initiatives.

Retail FX

Eurotrader acquires UK broker Petra Asset Management

Eurotrader Group has formally entered into the UK market with the acquisition of FCA-regulated broker, previously named Petra Asset Management Ltd. The new entity operates under the brand name Eurotrade Capital Ltd.

Inside View, Retail FX

The Game of Chess Continues – OPEC, China and the Oil Market

Over the past decade, the US has been complaining about the amount of power which the BRIC group, and specifically China, has on the global economy. BRIC stands for Brazil, Russia, India and China; these were the world’s fastest growing economies. Only in the past 10 months, the US has turned their attention toward OPEC due to the prices of fuel. Nevertheless, China seems to have a strong influence even over the price of crude oil.

<