January 25, 2021

Revolut applies for UK banking licence to boost primary account numbers

Revolut has applied for a banking licence in the UK in a bid to increase its primary account numbers.

Nikolay Storonsky, founder and CEO of Revolut

A Revolut survey reports that 50% of its customers would use their account as their main financial hub if it were covered by a deposit guarantee scheme.

A successful application for a licence would see the fintech gain £85,000 worth of cover for each account from the Financial Services Compensation Scheme (FSCS).

“We want to be the best in class for customer experience, value and capabilities, and offering full bank accounts allows us to do just that,” says CEO Nikolay Storonsky.

He adds gaining a licence is a “central pillar” of Revolut’s ambition to “drive innovation and competition” in the UK market.

Revolut holds an EU banking licence from Lithuania, and says it has begun to roll out banking services in central Europe.

The fintech had also sought a banking licence in Luxembourg, but withdrew its application as concerns were raised about its compliance practices.

Revolut said at the time it had done so to refocus its application on Ireland.

The fintech broke even in November 2020, and has around 13 million customers.

Lawsuits and locked accounts

Revolut customers have previously complained about the fintech’s heavy-handed response to the movement of large sums of money.

In September 2020, a Romanian customer revealed he would be suing the company. Revolut blocked his account after an attempt to transfer $4,800 from a bank account.

Resolver data reports Revolut receiving 3,911 complaints in 2020, up from 2,487 in 2019. Of those, 332 were about problems accessing funds, 79 transfer errors and 176 involving multiple issues.

The Financial Times has also reported on customers frozen out of their accounts. Revolut user Richard Walker found his account suspended after a £150,000 transfer.

The fintech has faced criticism for its attitude to compliance in the past. In 2019, The Telegraph reported on documents showing Revolut switched off an anti-money laundering system for three months.

Storonsky said at the time the documents referred to a “systems enhancement project”. He added the sanctions screening system was “just one part” of his firm’s compliance controls.

Later that year Revolut signed a deal with German regulatory reporting firm BearingPoint. It deployed the latter’s Abacus306 platform for EBA and AnaCredit compliance.

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