Revolut submits application for UK banking licence

Digital banking service has taken the long-overdue plunge and submitted an application to the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) for a banking licence.

Revolut was first rumoured to be applying for a banking licence in March last year and was reportedly hoping to seal the deal by the end of the year and the fintech also started its hunt for a UK chairperson to help it secure the ever-elusive banking licence.

Nik Storonsky, co-founder and CEO of Revolut, said: “A UK banking licence allows us to provide the essential financial products UK customers expect from their everyday primary bank account, such as loans, credit cards, overdrafts and deposit accounts, coupled with the additional trust and security that is offered through FSCS protection.”

“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. Becoming a fully licenced bank in the UK is a central pillar of that ambition.”

Just yesterday, Storonsky was interviewed by The Sunday Times about the benefits a banking licence would afford Revolut, including a potential 50 per cent boost to its deposits if it had a full licence. 

Under Revolut’s new licence any deposits held in a Revolut account will be protected under the Financial Services Compensation Scheme (FSCS) up to £85,000 per person.

Revolut says the application for a banking licence is the next natural step in cultivating its ‘super app’.

As well as offering more protection to its customers, Revolut is also hoping to introduce products such as overdrafts, loans and deposit accounts.

Former Standard Chartered CEO Richard Holmes, who joined the fintech in October 2020, will sit as an advisor to the board and as chairman of a ring-fenced bank in time.

In November 2020, Martin Gilbert, group chairman of Revolut,told AltFi: “We've recruited Richard as the chairman of what will eventually be a ring-fenced bank in three or four years as it gets bigger.”

Gilbert also told AltFi that, despite the initial desire to gain a full licence by the end of the year, Revolut’s application for a full UK banking licence was “still very much on track.”

The fintech was granted an EU banking licence from the Bank of Lithuania in 2018 and has been rolling out banking services across Europe since then, including launching a fully-fledged bank in Lithuania last May. 

Unlike its fellow digital banks, Monzo and Starling, which both gained full banking licences very early on in their journey, Revolut has prioritised growth.

The fintech has over 13 million customers across 37 countries and currently employs 2,000 people worldwide.