With approximately 10 million customers in the UK and 50 million worldwide, Revolut finally secured a banking license from the UK’s Prudential Regulation Authority (PRA) last year—a milestone the company had been pursuing since 2021. But direct competitors like Monzo and Starling navigated the same rigorous process more than a decade ago. What does this mean for the future of this fintech, then?
Shortly after obtaining the license, Revolut confirmed a new valuation of $45 billion in a secondary market share sale, signaling strong investor interest and fueling speculation about a potential IPO. The company also received regulatory approval to offer proprietary credit operations in Mexico, an expansion that reveals its ambition to establish itself as a global banking player on the digital revolution within the sector.
Headquartered in London, Revolut has built its reputation on global accounts and currency exchange, positioning itself as a leader in digital financial services. Founded by former Lehman Brothers trader Nik Storonsky, the company remains anchored in the UK, its primary market, despite global expansion efforts.
With its UK banking license, Revolut can now hold customer deposits and offer credit products—such as personal loans and credit cards—without relying on third-party banking partners. Previously, it operated as an electronic money institution, acting as an intermediary between consumers and licensed banks. The move brings it closer to traditional banks and could pave the way for a public listing, a topic of increasing market speculation.
Beyond the UK, the regulatory green light could serve as leverage for Revolut to secure similar approvals in key markets, including the United States, where fintechs continue to challenge incumbents. The ability to finance its own loans and mortgages also opens new revenue streams, further diversifying its business model.
Challenges and future outlook
Despite its newly acquired status, Revolut faces limitations. The company remains in a “mobilization phase,” a transitional period that can last up to a year, during which it cannot hold more than £50,000 in total customer deposits. Until this phase is completed, it will continue to operate under the oversight of the Financial Conduct Authority (FCA) as an electronic money institution.
Regulatory scrutiny is not new to Revolut. The company has previously faced investigations into anti-money laundering compliance and corporate culture concerns, prompting efforts to address these issues. Meanwhile, its financial performance remains strong, with record annual profits of £438 million in 2023, driven by higher interest rates and aggressive expansion plans.
For UK customers, the immediate impact is minimal. They can continue using their Revolut accounts as usual while the company works to finalize its transition into a full-fledged bank. However, the fintech’s next moves—whether an IPO, further international expansion, or new product offerings—will be closely watched as it seeks to establish itself as a dominant force in global banking.
