Revolut has secured a full banking licence from UK regulators after the Bank of England’s Prudential Regulation Authority, which regulates lenders, lifted restrictions on the authorisation it granted two years ago.
According to relevant announcements, the move ends a four-year wait for a permit that is crucial to the international growth of European fintech. The licence will allow Revolut to lend at scale in the UK and enter lucrative markets until now dominated by traditional banks.
Revolut, which has 13 million UK customers, has been in an extended mobilisation phase during which time its banking division could hold only £50,000 in total deposits, the reports said, also noting that although lenders are usually granted a full licence within 12 months of entering the mobilisation phase, Revolut had been waiting since July 2024. The delay is said to have, in part, been due to its size.
The protracted licensing process has been closely monitored by the UK government. Chancellor Rachel Reeves tried to broker a meeting between Revolut and PRA officials last year but was prevented by Bank of England governor Andrew Bailey, who, according to reports, thought this was inconsistent with regulatory impartiality.
Revolut already had a Lithuanian banking licence, which authorised it to operate across the EU. The UK licence will now allow the company to start lending in its home market while also granting greater protections for customer accounts. It will also mean the company is subject to greater regulatory scrutiny.
As reported in the Financial Times, Nik Storonsky, co-founder and chief executive, said, “Launching our UK bank has been a long-term strategic priority for Revolut . . . We look forward to introducing a full suite of banking services to our millions of UK customers, bringing the same innovative experience we already provide across the rest of Europe.” He added, “This is a vital step in our mission to build the world’s first truly global bank.”
Revolut secured a $75 billion valuation from investors in its latest funding round last year, even without having a full banking licence.
Its rise has posed a challenge to more traditional lenders such as Barclays and NatWest because of its slick banking app and ability to draw in a younger generation of customers. Barclays chief CS Venkatakrishnan said last year that Revolut had benefited from its lack of a UK licence, which meant it did not have the same obligations to depositors as fully regulated firms. Revolut said that as a UK payment service provider, and now a licensed bank, it “has always abided by the same regulatory and consumer protection standards as any traditional bank or other financial institution”.
The digital bank has also been granted authorisation to provide consumer credit services to its UK customers, according to the Financial Conduct Authority’s register. As noted in a Financial Times report on the development, "That approval opens the door for Revolut to launch a credit card in the UK, two years after it applied for a consumer credit licence in a separate move to its banking licence application. The green light from its home regulator has been seen as a gateway to winning similar approvals from watchdogs in other countries and the delay was a significant barrier to the group’s global international expansion plans."
Overseas regulators’ likely reliance on the PRA’s approval as Revolut’s home regulator meant that the UK watchdog was cautious before granting the licence, according to people familiar with the process, the UK news outlet also reported, adding that Revolut said last week that it had applied for a US banking licence, a process that is expected to be smoothed by the Trump administration’s openness to new entrants into the regulated banking system. The Financial Times also noted the PRA declined to comment on the development.
