Challenges Facing Revolut in Securing a UK Banking License Amidst Compliance and Operational Hurdles
The Prudential Regulatory Authority has granted Revolut a UK banking license with restrictions, ending the company’s long-standing pursuit of this license.
Revolut’s application for a UK banking license has been impeded by the company’s repeated failure to submit accounts on time, compliance concerns, and the sheer size of the business, which now has over 42 million global customers. This process has taken three years.
The above screenshot has been taken from the company’s website.
Strengthening Financial Performance and Simplifying Share Structure Amid Regulatory Scrutiny
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Recent robust revenues exceeding $2.2 billion in 2023 and a record profit before taxes of $545 million have alleviated regulatory concerns. In October, the company simplified its share ownership by consolidating its six classes of shares into a single class and clarifying its ownership structure. This was also a contributing factor.
- The global fintech now enters the PRA’s ‘mobilisation’ stage, having received authorisation with restrictions, designed for new banks to complete the build out of their banking operations
- During this mobilisation stage nothing changes for Revolut UK customers
Revolut is currently in the’mobilisation’ stage, which is also known as ‘Authorisation with Restrictions’. This is a common process for many new institutions in the United Kingdom. The fintech will pose a significant threat to the established hegemony by increasing its deposit base and offering products such as loans, mortgages, and credit cards in addition to its existing e-money services, once the build-out is complete and full authorisation is obtained.
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