Revolut seeking UK banking licence before year end
Revolut is gearing up its application for a UK banking licence in a bid to land one before the year ends, The Sunday Times reports.
Currently, the neobank only has one banking licence in Lithuania, with the majority of its 10 million customers served through an e-money licence which piggy backs off third-party banks and does not protect funds with deposit insurance schemes.
A UK licence would allow Revolut to hold customers’ deposits on its own balance sheet and boost returns by making direct loans.
As well as submitting an application for a UK banking licence, the challenger is also “mid-process” in its Australian banking licence application, where it has just put together a new team.
More banking licences will help Revolut grow sustainability – something its investors will want it to achieve over the next few years.
German challenger N26 left the UK last month, citing licence issues as its reason for severing ties with British customers. N26 reasoned that applying for a UK banking licence would require “complex regulatory measures” as well as “significant operational processes and costs”.
Revolut will now be embarking on this “complex” and “costly” regulatory road, pushing it away from leaning on the likes of Barclays to hold customer deposits, or partner Lending Works to offer fast credit.