Revolut, Europe's most valuable fintech startup, has received full regulatory approval from the Bank of England to operate as a bank in the UK. This allows it to offer protected deposit accounts and paves the way for consumer lending, enabling direct competition with major high street banks like Barclays and Lloyds.
The approval concludes a lengthy "mobilisation" phase that followed the granting of a restricted banking licence in July 2024 after a three-year wait. Revolut plans to roll out current accounts to new UK customers imminently and will migrate its existing 13 million UK users over the coming months.
While Revolut has grown rapidly to over 65 million global customers, analysts note its users typically hold lower deposits than at traditional banks and often use it as a secondary account. The full UK banking licence is seen as a crucial strategic milestone for the company in its home market.
Revolut, Europe's most valuable startup, said on Wednesday it had received regulatory approval to launch a British bank, allowing it to compete head-to-head with high street lenders in areas such as current accounts and consumer lending.
The London-based financial services firm, which has amassed â13 million customers â in Britain â but no physical branches since it was founded just over a decade ago, was granted a banking licence with restrictions in July 2024 âafter a three-year wait.
Nik Storonsky, Revolut's cofounder and CEO, has said getting a licence in its home market was his top priority.
Revolut said in a statement on Wednesday that the Bank of England's Prudential Regulation Authority had allowed it to end its "mobilisation" phase, which had lasted for longer than the usual 12-month limit.
This allows Revolut to offer protected deposit accounts âand "paves the way for a wider range of services in future, including lending â and other âproducts", the company added.
Revolut will now take on Britain's incumbent banks including Barclays, Lloyds and NatWest and said it expects to start rolling out current accounts to new clients "in a few days".
It â predicted the process of moving customers to the new bank to take "a âfew months in total".
"Launching our UK bank has been a long-term strategic priority âfor Revolut, and marks a significant moment in our journey. The UK is our home market and central to our growth," Storonsky said.
Revolut's rapid growth
Founded in 2015, Revolut has grown rapidly around the world in the last decade, with more than 65 million customers globally and a $75 billion private market valuation.
Its strategy has been to attract customers who use it as a secondary bank account for services including payments and foreign exchange transactions, then offer them âperks like subscriptions, Revolut's outgoing US CEO said last week.
A crypto boom helped its profit in 2024.
Despite its growth, analysts say average customer deposits at Revolut are lower than at traditional âbanks, and executives have âsaid too few use it â as their primary account.
Revolut already has a banking licence in Lithuania, which it uses as a "passport" into the European Union, and is seeking a licence in France.
It has also applied for a US bank charter.
"The full licence âwill open the door to balance sheet driven products and sharpen pressure on both traditional banks and the cohort of challenger banks," Elliot Reader, Director in Houlihan Lokey's FinTech Group, said of the UK development.
A spokesperson for Revolut said the slower-than-expected mobilisation process was due to its larger size.
The Financial Times previously reported that the licence was held up over regulators' concerns over whether its risk controls can keep pace with the rapid growth of its overseas operations.
The London-based financial services firm, which has amassed â13 million customers â in Britain â but no physical branches since it was founded just over a decade ago, was granted a banking licence with restrictions in July 2024 âafter a three-year wait.
Nik Storonsky, Revolut's cofounder and CEO, has said getting a licence in its home market was his top priority.
Revolut said in a statement on Wednesday that the Bank of England's Prudential Regulation Authority had allowed it to end its "mobilisation" phase, which had lasted for longer than the usual 12-month limit.
This allows Revolut to offer protected deposit accounts âand "paves the way for a wider range of services in future, including lending â and other âproducts", the company added.
Revolut will now take on Britain's incumbent banks including Barclays, Lloyds and NatWest and said it expects to start rolling out current accounts to new clients "in a few days".
It â predicted the process of moving customers to the new bank to take "a âfew months in total".
"Launching our UK bank has been a long-term strategic priority âfor Revolut, and marks a significant moment in our journey. The UK is our home market and central to our growth," Storonsky said.
Revolut's rapid growth
Founded in 2015, Revolut has grown rapidly around the world in the last decade, with more than 65 million customers globally and a $75 billion private market valuation.
Its strategy has been to attract customers who use it as a secondary bank account for services including payments and foreign exchange transactions, then offer them âperks like subscriptions, Revolut's outgoing US CEO said last week.
A crypto boom helped its profit in 2024.
Despite its growth, analysts say average customer deposits at Revolut are lower than at traditional âbanks, and executives have âsaid too few use it â as their primary account.
Revolut already has a banking licence in Lithuania, which it uses as a "passport" into the European Union, and is seeking a licence in France.
It has also applied for a US bank charter.
"The full licence âwill open the door to balance sheet driven products and sharpen pressure on both traditional banks and the cohort of challenger banks," Elliot Reader, Director in Houlihan Lokey's FinTech Group, said of the UK development.
A spokesperson for Revolut said the slower-than-expected mobilisation process was due to its larger size.
The Financial Times previously reported that the licence was held up over regulators' concerns over whether its risk controls can keep pace with the rapid growth of its overseas operations.
Meridiano
