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Regulators Pause Revolut’s Full Banking Approval Amid Risk Oversight Concerns
Revolut’s long pursuit of a full UK banking licence has entered another period of scrutiny as regulators seek stronger assurances about the company’s ability to manage risk in line with its growing international presence.
According to individuals familiar with the matter, officials at the Bank of England’s Prudential Regulation Authority (PRA) have requested that Revolut demonstrate more robust systems to manage compliance, capital requirements, and information technology before the fintech can exit its current “mobilisation phase.”
Revolut, based in London and serving roughly 65 million customers across 40 countries, received conditional approval for a UK banking licence in July 2024. That milestone followed a three-year process of negotiations and documentation. However, the company remains subject to restrictions while regulators verify the strength of its risk management infrastructure.
Mobilisation Period Extended Beyond Standard Duration
The PRA describes the mobilisation period as a transitional phase, typically lasting 12 months, during which a firm builds the operational systems necessary to function as a full bank. For Revolut, the process has now extended beyond 14 months, making it one of the longer licensing timelines in recent years.
During this period, the fintech’s UK banking division is permitted to hold only £50,000 in deposits while developing its internal governance frameworks. The PRA and the Financial Conduct Authority continue to evaluate Revolut’s readiness before granting full authorisation.
People close to the process said the PRA is reviewing how Revolut’s controls function not only in the UK but also across its overseas branches. The regulator’s concern centers on whether the company’s current systems can scale safely with its international growth plans.
Global Expansion Adds Complexity
Revolut’s expansion ambitions have increased the complexity of its licensing process. The company has already secured banking licences in the European Union through Lithuania’s central bank, and additional approvals in Mexico and Colombia. These new operations add layers of supervision that regulators in London must consider when assessing systemic risk.
The Bank of England, which oversees the PRA, is aware that granting Revolut a full UK licence would likely influence regulators in other countries. Approval from the UK’s central authority often serves as a signal of confidence that can accelerate similar decisions abroad. For that reason, the PRA is proceeding with caution to ensure that Revolut’s systems meet expectations before granting unrestricted status.
Balancing Growth and Governance
Revolut’s leadership has acknowledged that the company’s early growth strategy placed expansion ahead of licensing compliance. In recent months, executives have outlined efforts to strengthen the firm’s internal audit, compliance, and cybersecurity frameworks.
During a public presentation at its new Canary Wharf headquarters, co-founder Nik Storonsky said that obtaining the full UK banking licence is the company’s top priority. He described earlier decisions to rely on lighter regulatory categories — such as electronic money and payment licences — as short-term choices that produced limitations in product quality.
This acknowledgment reflects a broader pattern among fast-growing fintech firms: rapid scaling often exposes weaknesses in governance, prompting closer attention from regulators. The PRA’s current review underscores how oversight agencies are seeking to ensure that global expansion does not outpace internal control systems.
Implications for the UK Lending Market
A full UK banking licence would grant Revolut access to the domestic lending market, enabling it to deploy customer deposits for loans and other credit products. Such a move could introduce new competition to established high-street banks, particularly in digital consumer finance.
However, without the licence, Revolut’s capacity to operate as a traditional bank remains limited. The company continues to function as a hybrid platform that combines payments, foreign exchange, and investment services under its existing permissions.
Market analysts note that once full authorisation is granted, Revolut could significantly expand its product range in the UK, aligning it with other digital banks that already offer credit and mortgage services. Yet, regulatory caution signals that the process may take additional time, particularly given the company’s scale and cross-border activities.
Regulatory Approach Reflects Broader Trends
The PRA’s cautious stance mirrors a global shift in how authorities approach large fintech firms. Regulators are increasingly aware that the speed of technological growth can outstrip the evolution of risk management systems. For high-volume financial platforms, even minor control failures can have international implications.
In Revolut’s case, the company’s international customer base and rapid addition of new markets have made oversight more challenging. Regulators are focusing on how to ensure that controls on anti-money laundering, cybersecurity, and capital adequacy are consistent across jurisdictions.
This attention to structural integrity is not unique to the UK. Similar delays have appeared in other countries reviewing the expansion of global digital banks, especially where compliance frameworks were initially designed for narrower markets.
A Test Case for Global Fintech Regulation
Revolut’s licensing process may set a precedent for how multinational fintech firms interact with national regulators. Because the PRA’s decision could influence similar applications abroad, the outcome will likely shape expectations across multiple financial systems.
Industry observers view the process as a test of balance: how to foster innovation without weakening safeguards. The British regulator’s approach suggests that approval may hinge not just on financial soundness but also on the maturity of operational discipline across borders.
While Revolut continues to expand elsewhere, including new market entries planned for 30 additional countries by the end of the decade, its domestic licence remains a decisive goal. Achieving it would complete the company’s transformation from a high-growth platform into a fully accredited financial institution operating under UK standards.
Outlook
Revolut’s ongoing dialogue with regulators illustrates the tension between speed and stability that defines modern fintech. The company’s rapid rise demonstrates how digital platforms can reach global scale, but it also reveals how regulatory oversight adapts to keep pace.
The PRA has not indicated when the review will conclude, and both sides have emphasized that the mobilisation phase has no fixed end date. For now, Revolut remains in partial operation within its home market while expanding abroad — a reminder that in global finance, growth often moves faster than permission.
