Buzzy fintech Revolut has officially applied to become a UK bank.
Revolut said on Monday it had lodged paperwork with the UK’s Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) to apply for a banking licence.
Founded in 2015, Revolut began life as a foreign exchange app tied to a payment card. Today, it offer a wide range of financial services — everything from crypto and stock investments to business accounts.
The company holds client cash under a so-called “e-money” licence. A full banking licence would allow it to offer things like overdraft lending and loans. Customers would also be covered by the Financial Services Compensation Scheme (FSCS), which provides government protection on deposits of up to £85,000 ($114,700).
“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,” chief executive Nikolay Storonsky said in a statement.
Storonsky has said in the past that Revolut did not need a banking licence and the regulation would slow the company down. The push to secure a banking licence comes as Revolut and fintechs like it look for new revenue streams. A significant percentage of Revolut’s income comes from small fees charged on card transactions, which have declined during the pandemic.
“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,” Storonsky said. “Becoming a fully licensed bank in the UK is a central pillar of that ambition.”
Revolut already has a banking licence in Lithuania, which is secured in 2018. Brexit means the company cannot “passport” this licence to the UK.
Richard Holmes, Standard Chartered’s (STAN.L) former European chief executive, will head up Revolut’s banking plans. Holmes joined the company last October.
Revolut has over 13m customers around the world and was valued at $5.5bn in a funding deal last July.
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