London-based fintech Revolut has secured a French banking licence, strengthening its position in continental Europe and laying the groundwork for a major expansion of its operations
from Paris.
The licence, granted by France’s banking regulator ACPR in conjunction with the European Central Bank, marks an important step in Revolut’s strategy to establish France as its Western European base. The company intends to move customers in the region from its existing Lithuanian banking entity to locally regulated operations.
Revolut has already become one of Europe’s most powerful digital banking challengers, building a customer base of more than 75 million without relying on a traditional branch network. Its rise has increasingly brought it into direct competition with established banking groups and their digital subsidiaries, including Société Générale’s BoursoBank in France.
Until now, Revolut has been able to provide banking services across the European Union by using its Lithuanian banking licence under the EU’s passporting system. A French licence, however, gives the company a stronger domestic regulatory footing and greater scope to develop products specifically for French customers, including lending and regulated savings.
The move comes as Revolut seeks to broaden its business beyond the fee income and cryptocurrency activity that have helped drive its rapid growth. Lending and other financial products are expected to play a greater role as the company attempts to turn its enormous customer base into a wider banking franchise.
Revolut declined to comment on reports that regulators could impose restrictions on some new products at its French operation. A company spokesperson said only that the licence allowed Revolut to operate as a bank across the European Union, adding that it did not comment on its regulatory arrangements.
Paris becomes the centre of Revolut’s Western European push
The French licence is the latest in a series of moves that underline the importance of France to Revolut’s international strategy.
The company has committed around $1.1 billion to its French expansion, signed a 10-year lease for premises in Paris and appointed former Société Générale chief executive Frédéric Oudéa as chairman for Western Europe.
Revolut said it plans to recruit more than 600 people across Western Europe, including about 400 in France.
The company will begin transferring French customers to its new French entity before extending the process to Germany, Ireland, Italy, Portugal and Spain.
The strategy gives Paris a role that goes beyond serving the French market. Revolut wants the city to function as its operational headquarters for Western Europe, reflecting the fintech’s ambition to compete on a much larger scale with established European banks.
The timing is also significant for Revolut in Britain. The company received its long-awaited UK banking licence in March, strengthening its position in its home market while it continues to build a regulatory footprint across Europe.
From fintech challenger to banking heavyweight
Revolut’s expansion comes as its financial and corporate valuation has risen sharply. The company has begun a secondary share sale at a valuation of about $115 billion, according to a source cited in July.
At that level, Revolut would be valued above several long-established European banking groups, including Société Générale and Barclays.
The scale of the valuation illustrates how far the company has travelled since emerging as one of the new generation of European fintechs in the 2010s.
Its next challenge is to convert that growth into a fully diversified banking business. The French licence provides an important piece of that strategy, while also strengthening Revolut’s regulatory credentials as it looks beyond Europe.
Chief executive Nik Storonsky has previously indicated that securing licences in France and the United States could form part of the company’s wider international ambitions.
For Revolut, Paris is therefore not simply another market. It is becoming the launchpad for the next stage of the company’s attempt to challenge Europe’s traditional banking establishment. Photo by Boubloub, Wikimedia commons.
