As speculation about the fate of the fintech company mounts, watchdogs are under pressure to decide Revolut’s future, experts warn
Watchdogs are under pressure to decide Revolut’s future, experts warned last night.
There is speculation about the fate of the fintech company.
The London-based company – once seen as the industry’s darling – has been seeking a UK banking license for over two years.
The application has become increasingly mired in controversy amid growing frustration at Revolut over the lengthy process.
A City analyst warned there is now “a lot of pressure on regulators” and urged them to be “very careful”.
Busy: Revolut – once seen as the industry’s darling – has been seeking a UK banking license for over two years
License applications must be approved by two regulators: the Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA). Rivals Monzo and Starling have obtained licenses and the process usually takes about a year.
But Revolut’s chances took a setback in early March when its auditor said parts of its delinquent accounts were “materially inaccurate.”
At the time, the company insisted it would be licensed “soon,” possibly within days, but nearly three months later it’s still waiting.
Meanwhile, financial director Mikko Salovaara has stepped down for ‘personal reasons’, while other senior figures have also left. Revolut’s impatience seemed to boil over earlier this month when boss and co-founder Nik Storonsky lamented the “long and tiring process” and warned that Britain is an undesirable place to do business.
But the outburst sparked criticism from observers, with one analyst warning that throwing a “tantrum” wouldn’t help Revolut secure a banking license.
Speculation about his fate intensified this week when it emerged that the PRA had told the Treasury that it intended to reject its application for a banking license.
Failure to obtain a license from the country’s regulatory authorities could seriously undermine ambitions to expand abroad. Revolut would have offered to withdraw from the UK and asked the regulators if it was not desirable here. But it was assured that the process was ongoing and its application was still being considered.
Dame Angela Eagle, Labor MP and member of the Commons Treasury committee, said regulators should take their time with the licensing process.
Gary Greenwood, investment analyst at Shore Capital, said: “There’s a lot of pressure on regulators if this goes wrong, so they have to be very careful.”
The Bank and the FCA declined to comment on the application process.
A Revolut spokesperson said: “We are not commenting on pending regulatory applications. We are a British company and London is our home.’