Revolut’s bumpy ride to a full banking license & what it means for SMEs

Previous Startups’ 100 winner, Revolut, has finally secured a full UK banking licence after a five-year regulatory approval process.

The long-awaited decision from the Prudential Regulation Authority (PRA) allows the fintech to operate as a fully-fledged bank in the UK. This means it can now hold larger customer deposits and expand into offering more lucrative products such as loans and mortgages.

Beyond broadening the range of lending products in the UK market, Revolut’s win demonstrates an insightful lesson for startups that even successful disruptors aren’t immune to facing long, complex regulatory processes and red tape. In fact, sometimes they attract greater scrutiny, and it can significantly hinder growth.

What does this change mean for Revolut’s small business customers?

One immediate change for businesses of any size that are banking – or considering banking – with Revolut is the additional security they’ll be afforded by the Financial Services Compensation Scheme (FSCS). 

If your business is a separate legal entity, such as a limited company, deposits of up to £120,000 will now be protected by the FSCS. Sole traders, on the other hand, “are treated as one entity under FSCS, and the protection applies to the total of both your personal and business deposits held with Revolut Bank up to £120,000,” Revolut explains on its website.

In simple terms, this means that persons/firms banking with Revolut will be protected from insolvency just like they are at any other licensed bank. 

This was not the case when Revolut was an Electronic Money Institution (EMI). During this time, it instead “safeguarded” deposits by holding money in partner banks. Complex insolvency cases can make funds safeguarded EMIs harder to access than FSCS compensation, and administrative costs are sometimes deducted. 

High-growth startups still face regulatory hurdles

In 2019, we crowned Revolut the winner of our Startups 100 Index, calling it “disruptive, innovative, with amazing global growth potential.” With a bold mission statement to “simplify all things money,” it was clear the startup was destined for big things.

But it was only by 2024 that the fintech company was granted a restricted licence, allowing it to test banking systems with a limited number of customers while regulators kept an eye on its controls and governance.

The process involved rigorous scrutiny of the company’s accounting systems and compliance procedures, before, at long last, regulators decided they were satisfied it could operate as a fully licensed bank, as reported by the Guardian. 

With over 70 million users worldwide, 13 million of those in the UK, and a $75bn (£55bn) valuation as of September 2025, the online bank holds a significant presence, yet up until now, it has been restricted from full expansion.

It’s an important reminder for startups in regulated industries such as tech, finance, or healthcare that regulatory approvals are no simple feat and can significantly delay scaling.

Reputation and culture can influence growth

One reason for the delay in Revolut receiving full approval from the PRA was its reputational damage. The company has previously come under fire following high-profile cyber incidents that led to customers losing faith and taking their money elsewhere. 

Regulators were reportedly worried about the company’s aggressive organisational culture during the earlier stages of the approval process. 

Additionally, Revolut faced challenges in demonstrating to regulators that it had resolved several issues related to accounting and violations of EU regulations. 

These factors contributed to the hurdles the company needed to overcome before receiving its full license.

For startups in the fintech space, these are important areas that may often be overlooked. Internal culture, governance, security practices, and risk management can also have a tangible influence on whether your business wins the trust of regulators and manages to reach its full potential.

What founders should take from Revolut’s win

Revolut’s journey highlights several practical takeaways for founders working on building disruptive companies while navigating the web of red tape in complex industries like finance. 

Most obviously perhaps, the reminder that securing regulatory approval can take years rather than months, particularly in sectors like finance. 

And equally, how reputation can become just as important as demonstrating a disruptive spirit when your company needs to win the approval of regulators and large institutions. 

As startups expand, internal culture and operations become increasingly visible points of interest, which attracts greater scrutiny. So while this means that a rebellious spirit can build momentum in the earlier days, it may need to mature quickly if companies are to fully flourish.