Revolut CEO Nik Storonsky blamed recent banking crisis about the latest delay to fintech’s long-awaited UK banking license, arguing that the cause of the delay “wasn’t really our fault”.
Revolution has been locked in discussions with the Financial Conduct Authority and the Prudential Regulatory Authority over UK banking licenses for more than two years, much longer than typical turnaround time of less than a year.
Since the application was submitted in January 2021, Revolut has lost some of the most senior executives in the UK banking group. Management agencies have also implemented evaluate the culture of fintechwhich executives say has improved.
Revolut CFO Mikko Salovaara says UK license coming soonany day” on March 1st.
Fintech sees the UK license as crucial to its hopes of providing loans and other services to the more than 5.8 million customers it already has in the UK. It will also act as a seal of approval to help win other banking licenses in key markets.
Storonsky told the Financial Times of the UK license approval delay: “Ultimately, it’s not really us, it’s generally the banking crisis we’re seeing at the moment that’s causing regulators to reason to be more cautious.
The FCA and PRA both declined to comment. Operational groups working on Revolut’s license application are not the same as the officials who are monitoring UK regulatory work about Credit Suisse and Silicon Valley Bank – two of the biggest victims of the banking crisis that show no signs of abating – despite some overlap at the very top.
Two people familiar with the UK’s licensing process said the recent turmoil “will not affect” Revolut’s application.
Regulators in the UK have asked Revolut bosses about eligible on their 2021 deferred accounts, warned that there was a risk of revenue being “seriously skewed,” a person familiar with the situation told the FT. Separately, the FCA ordered an independent review of Revolut’s policies to prevent and detect financial crime by 2020, under a process known as section 166.
Cryptocurrency trading fees are Revolut’s single largest source of revenue in 2021, accounting for around a third of the reported £636 million. Other streams include higher-tier card subscription services and lending products in Europe, such as buy-now, pay-later services.
FCA has faced criticism for its slow processing of licenses and other licensing applications made to it in general.
In a recent interview with the FT, FCA chief executive Nikhil Rathi would not comment on Revolut’s case but said most delays in its license applications were due to regulatory concerns. actually and said the regulator would be “much more forthright and open about saying that in the future”.
According to two people familiar with the approval process, Revolut’s movement on banking licenses appears to have slowed or nearly stopped. Meanwhile, a lack of licenses is preventing Revolut from competing fully in the US, Canada or Australia, as regulators there are monitoring UK decision-making.
Revolut said it does not comment on license applications or its legal relationships.
“If you’re a business and you want to build something, then uncertainty kills you because you don’t know what you can do, what you can’t do,” Storonsky added.
Two people familiar with the company said they were considering leaving the UK, which would deal a blow to the UK’s fintech sector and contradict its aim to be a global tech hub. by Prime Minister Rishi Sunak.
“We are a British company and London is our home,” the company said in a statement.
Asked about the government’s desire to encourage innovation and investment, Storonsky said: “The reality is different.”