Revolut, the British “unicorn” fintech startup, has applied for a full banking licence in the UK, submitting its application to the Financial Conduct Authority and the Prudential Regulation Authority this month.
The license would allow the challenger bank to provide customers full-service current accounts and products like overdrafts, loans and deposit accounts.
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Revolut’s billionaire founder and CEO Nikolay Storonsky said: “We want to be the best in class for customer experience, value and capabilities, and offering full bank accounts allows us to do just that.”
Gunning for salary deposits
“In the future, we want to offer many more innovative products to our UK customers, and we are excited to continue driving innovation and competition in the banking industry,” Storonsky added.
The company’s goal is to make it easier to convince customers to deposit their salaries in Revolut accounts. A Revolut survey found that 50% would be willing to do so if their money were covered by a deposit guarantee scheme.
Revolut currently has an e-money licence and holds customers’ funds in big banks. A banking licence would provide every customer in the UK with £85,000 of cover from the Financial Services Compensation Scheme.
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By GlobalDataThe digital bank to face tough questions from regulators
As it applies for a banking license, the London-based startup will likely face tough questions from regulators over its internal culture. Over the past year, media reports have focused on the “the human cost” of Revolut’s rapid rise.
People being asked to work for free as part of their job applications, excessively long hours, a culture of “hitting targets at all costs”, and high staff turnover are among the allegations.
Revolut has pushed back, insisting in a blog post that it has already addressed the issues raised in the article.
CEO and founder Nikolay Storonsky said: “the allegations in the media are not an accurate reflection of the company that we are today.”
Industry observers expect the UK’s banking regulator, the FCA, will likely apply extra scrutiny to the startup’s culture in light of the media reports.
Revolut has had more than 13 million customers since its launch in 2015 and employs over 2,000 people worldwide, with around 800 based in London.
The chance to make a profit from loans and deposit-taking will be a boon for the annually loss-making Revolut in 2021
