Revolut is facing delays in securing a complete UK banking licence due to regulatory concerns about its risk management capabilities amidst its global expansion, reported The Financial Times (FT).
According to familiar sources, the officials of the Bank of England “have sought commitments” from Revolut to enhance its risk management infrastructure in line with its plans for international expansion.
The company is in the midst of a “mobilisation phase” after being granted a conditional UK banking licence in July 2024.
The Prudential Regulation Authority (PRA), a regulatory body of the Bank of England, is evaluating Revolut’s risk management processes both within the UK and on a global scale.
Sourced told the FT that this close examination is a significant factor in the extended timeline for Revolut to obtain a full banking licence, which would permit the company to offer lending services in the UK market.
While in the mobilisation phase, Revolut’s banking division is restricted to holding no more than £50,000 ($66,690) in total deposits.
The PRA is also said to be considering the international impact of granting Revolut a full UK banking licence, as it could influence regulatory decisions in other countries.
Revolut recently announced its strategy to expand into 30 new markets by the end of the decade.
The company’s co-founder, Nik Storonsky, has stated that securing the UK banking licence is the company’s “number one priority” and “that it had been a mistake for the company to prioritise growth over becoming properly licensed in its early stages.”
The PRA notes that the mobilisation phase generally lasts about a year, but for Revolut, it has already surpassed 14 months.
The PRA and the company have acknowledged that the duration can vary for more complex entities.
In spite of the wait for full UK accreditation, Revolut has obtained banking licences in the European Union and Mexico.
It has also been approved to establish banking operations in Colombia, pending additional authorisations for lending services.
According to FT, Revolut is also exploring opportunities in the US market, including the potential purchase of a bank to secure a national charter for lending nationwide.
Revolut has not commented on the delays but has previously indicated that it is nearing the end of the mobilisation phase and is actively working with the PRA.
