Revolut has finally won a UK banking licence, intensifying the neobank threat to traditional finance.
The breakthrough ends a painful wait for Europe’s most valuable fintech firm, which first applied for a licence in January 2021.
Regulators were reportedly concerned about Revolut’s accounts, but politicians offered vocal support. Jeremy Hunt, the former chancellor, called the company a “shining example from our world-beating fintech sector.”
With the new license, Revolut can push that sector further into mainstream finance. But first, the company must complete a “mobilisation stage,” designed for testing systems before a full launch. According to the Bank of England, this stage can take “as little as a few months” and “no longer than 12 months.”
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Once mobilisation is complete, the full rights will be granted. Revolut can then provide overdrafts, loans, and savings products — just like traditional banks. The company’s 9 million UK customers will also gain protection on deposits of up to £85,000.
Nik Storonsky, CEO of Revolut, called the license an “important milestone in the journey” of his firm.
“We will ensure we deliver on making Revolut the bank of choice for UK customers,” he said.
The license also brings broader legitimacy to British neobanks. With a $33bn valuation, Revolut is already worth as much as many traditional banking giants. The disruptor is now reportedly near a new valuation of $45bn, which would push it above Barclays and NatWest.
Despite these heady numbers, rival neobanks have been faster to win UK banking licences. The likes of Monzo, Starling, and Atom received the approval years ago.
By joining these challengers, Revolut can accelerate its push into mainstream finance. Britain’s banking establishment is getting a reshuffle.
Published July 25, 2024 – 9:29 am UTC
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