What’s happening with Revolut? The £28B challenger bank’s licence has been delayed over industry concerns

Revolut, the UK-based digital bank valued at £28 billion, has experienced setbacks in its attempts to obtain a banking licence from the Financial Conduct Authority (FCA).

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According to a report by This is Money, Revolut has been cautioned by UK regulators just a month after the modern payment app indicated to customers that their banking licence was imminent. 

Auditor BDO said £477 million of revenue from Revolut – around three-quarters of its turnover – could not be verified and may have been misstated.

Revolut has hit out against what it described as ‘misreporting’ of the auditor’s opinion in this case.

What is Revolut?

Revolut is a digital challenger bank that offers a range of financial services, including foreign currency exchange, budgeting tools, and cryptocurrency trading. The company has gained significant popularity in recent years, attracting millions of users worldwide.

Revolut’s confidence in obtaining its banking licence came down to figures: In January 2022, the bank had reported a £26 million profit for 2021, alongside a tripled turnover of £636 million during the cryptocurrency boom. However, the release of those results was delayed, missing the December 31 deadline.

As a result, the Financial Conduct Authority (FCA), the UK’s financial regulator, has been keeping a close eye on Revolut’s operations. The FCA has reportedly issued several warnings to the company over the past year for failing to meet its regulatory obligations.

Industry Concerns

Concerns over Revoluts’ long-delayed 2021 accounts have been compounded by wider industry problems. 

Recently, huge players in the banking sector – for example 167-year-old Credit Suisse – have been ‘bleeding billions’ after critical banking mistakes. As a result, regulators are feeling immense pressure from venture capitalists and investors to be stricter about their processes in an attempt to mitigate any uncertainty or concern surrounding holdings and investments.

What is a challenger bank?

Numerous companies have emerged in recent years to challenge the ‘old ways’ of finance and disrupt and revolutionise the industry. These businesses are seeking to make people’s lives easier with clever, tech-based solutions, from quick and straightforward mortgage applications to unique takes on loyalty rewards, such as fellow challenger bank Yonder.

A digital challenger bank is a new type of bank/fintech company that aims to ‘challenge’ the big four UK banks: Natwest Group, Barclays, Lloyds TSB, and HSBC. Revolut is considered one of these new kinds of banks.

What’s next

Revolut has acknowledged its issues and committed to addressing them, as the bank may face further regulatory action if it fails to meet the FCA’s expectations. 

Revolut has already faced regulatory scrutiny in the past over its failure to report suspicious transactions to relevant authorities.

Only time will tell if it can fulfil all the new requirements necessary to truly challenge the banking status quo. 


Photo source: Aleksandrs Karevs

Written by:
Stephanie Lennox is the resident funding & finance expert at Startups: A successful startup founder in her own right, 2x bestselling author and business strategist, she covers everything from business grants and loans to venture capital and angel investing. With over 14 years of hands-on experience in the startup industry, Stephanie is passionate about how business owners can not only survive but thrive in the face of turbulent financial times and economic crises. With a background in media, publishing, finance and sales psychology, and an education at Oxford University, Stephanie has been featured on all things 'entrepreneur' in such prominent media outlets as The Bookseller, The Guardian, TimeOut, The Southbank Centre and ITV News, as well as several other national publications.

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