While Revolut has been operating in the UK since 2015, it has never been a bank. It could not be called one in the UK, because it did not have a licence to be one.
In 2021,the finance app applied for a banking licence with UK regulators, but has been unsuccessful up until now.
It has now finally been granted a UK banking licence with restrictions, a common process, from the Prudential Regulation Authority (PRA) – the regulator responsible for overseeing UK banks.
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Revolut, which has more than nine million customers in the UK alone, will use the restricted period to build out its banking operations in the country.
Nik Storonsky, chief executive of Revolut, said: “We are incredibly proud to reach this important milestone in the journey of the company and we will ensure we deliver on making Revolut the bank of choice for UK customers.” See our piece on what else fintech billionaire Storonsky has planned.
Francesca Carlesi, UK chief executive of Revolut, said the fintech will “work relentlessly” to offer products and services that improve the financial lives of its customers.
The brand already has a European banking licence – it was granted a specialised one by the Bank of Lithuania in 2018. It was also granted one in Mexico earlier this year.
But, a UK licence will be a more significant part of the fintech's growth.
What does the UK banking licence mean for Revolut customers?
The UK banking licence means Revolut will be able to offer similar products as other UK banks – competing for everything from current accounts, mortgages, loans to the best savings accounts.
It also means that UK users will benefit from protection from the Financial Services Compensation Scheme – which protects up to £85,000 of your money should a bank go bust.
Revolut has so far been popular with users for low costs, ease of use and free travel spending, as well as for those sending money abroad.
Revolut also recently saw record profits. Its financial accounts for 2023 showed the group’s revenues surpassed $2.2bn, with record profits before tax of $545m. In its annual report Revolut also further hinted at plans for a stock market flotation.
Is Revolut safe?
Revolut has come under fire in recent years over the handling of fraud and the app’s safety, leaving its reputation somewhat bruised.
In 2022, Revolut group was also fined €200,000 for breaches relating to the prevention of money laundering and terrorist financing..
But, the UK banking licence could be a turning point for Revolut as it grows to secure a spot as a reputable provider in the UK’s banking system.
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