Revolut has applied to the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), the UK regulators, for a full banking license to fuel expansion beyond its FinTech roots.
The license, according to the application, would enable Revolut to offer overdrafts, loans and deposit accounts, it said in a statement. The firm would also be covered by the UK’s Financial Services Compensation Scheme, which protects customer deposits of £85,000 ($114,700) or below if a business goes bust.
Launched in 2015, Revolut offers a growing number of services through its app, including a prepaid debit card with no overseas transaction fees, foreign currency transfers, budgeting tools and cryptocurrency trading. The company was valued at $5.5 billion in a private fundraising round last year.
After facing increased regulatory scrutiny, the firm hired several London finance veterans to help develop its banking services. Martin Gilbert, former head of asset manager Standard Life Aberdeen, took over as chairman in 2019 and was joined on the board last year by Michael Sherwood, once a key figure at Goldman Sachs Group. The company also brought in former Standard Chartered Group executive Richard Holmes as an adviser in October.
Revolut already holds an e-money license in the UK, which allows it to offer digital cash alternatives and online payments. The firm obtained a European banking license in Lithuania in 2018 that it’s using to roll out banking services in central Europe.
“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,” said Nik Storonsky, chief executive and founder.
“We want to be the best in class for customer experience, value and capabilities, and offering full bank accounts allows us to do just that.
“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 licensed bank in the UK is a central pillar of that ambition.”