Digital banking giant Revolut has secured a full banking licence in the United Kingdom, marking a major milestone for Europe’s most valuable start-up after years of regulatory scrutiny and
delays. The London-based fintech announced Wednesday that the UK’s banking regulator, the Prudential Regulation Authority, part of the Bank of England, has approved the company to exit its so-called “mobilisation” phase. This transitional stage, which typically lasts around a year, had stretched longer for Revolut as regulators assessed the company’s readiness to operate as a fully fledged bank.
The decision clears the way for Revolut to offer protected deposit accounts and gradually expand into a broader range of financial services, including consumer lending.
A long-awaited approval
For co-founder and CEO Nik Storonsky, gaining a full banking licence in the company’s home market has long been a strategic priority. Revolut first received a restricted licence in July 2024 after a three-year approval process.
“This is a significant moment in our journey,” Storonsky said in a statement. “The UK is our home market and central to our growth strategy.”
With the licence now in place, Revolut plans to begin rolling out full current accounts to new customers within days. The company expects the transition of existing users to its new banking structure to take several months.
Challenging Britain’s big banks
The move positions Revolut to compete more directly with established UK lenders such as Barclays, Lloyds Banking Group and NatWest Group.
Unlike traditional banks, Revolut has built its customer base without physical branches. Since launching in 2015, the fintech has attracted about 13 million users in the UK alone by offering digital payments, foreign exchange services and subscription-based perks.
Analysts say the new licence could significantly broaden its business model, enabling balance-sheet-driven products such as loans and other credit offerings.
Rapid growth, new ambitions
Revolut’s expansion has been rapid. The company now serves more than 65 million customers globally and has reached a private valuation of roughly $75 billion.
Its strategy has largely focused on becoming customers’ secondary banking app, handling international payments, currency exchanges and other digital services before gradually encouraging users to make it their primary financial account.
The company’s profits also received a boost in 2024 during a surge in cryptocurrency trading.
However, analysts note that average deposits held by Revolut customers remain lower than those at traditional banks, and the company has acknowledged that only a portion of users rely on it as their main account.
Expanding beyond the UK
Revolut already operates under a European banking licence issued in Lithuania, allowing it to offer services across the European Union. The fintech is also seeking a banking licence in France and has applied for a bank charter in the United States.
Industry experts say the UK licence could accelerate competition in the country’s banking sector.
“The full licence will open the door to balance-sheet driven products and increase pressure on both traditional banks and challenger banks,” said Elliot Reader, director in the FinTech group at Houlihan Lokey.
The company acknowledged that its mobilisation phase took longer than usual due to the scale of its operations. Previous reports had suggested regulators were examining whether its risk management systems could keep up with the fast growth of its global business.
With the regulatory hurdle now cleared, Revolut is preparing for its biggest push yet in the UK banking market. Photo by Boubloub, Wikimedia commons.