Revolut’s UK Banking License Hits Regulatory Wall Over Global Risk Control Concerns

Regulators slam brakes on Revolut's banking ambitions as global risk management comes under scrutiny.

The Compliance Conundrum

Financial watchdogs aren't buying Revolut's risk control narrative. The UK's banking license approval process grinds to a halt while authorities dig deeper into the fintech's global operations framework. Questions swirl about whether the digital banking disruptor can handle traditional banking responsibilities.

Behind the Regulatory Standoff

Sources close to the matter reveal regulators want more than just promises. They're demanding concrete evidence that Revolut's risk management can scale across multiple jurisdictions without compromising financial stability. The delay signals growing pains for fintechs trying to bridge the gap between innovation and regulation.

What's Really at Stake

This isn't just about paperwork—it's about proving digital banking can play by the same rules as legacy institutions. The holdup exposes the fundamental tension between moving fast and not breaking things when billions in customer deposits are involved.

Another day, another fintech learning that banking regulations don't care about your valuation—they care about your compliance department. Maybe next time include risk managers in those funding rounds alongside the marketing team.

What to Know:

• Regulators worry Revolut's risk controls may not keep up with its rapid overseas growth, according to a Financial Times report citing unnamed sources.
• The company received a restricted UK banking license in 2024 but needs full authorization to transfer customers and offer credit products.
• CEO Nik Storonsky identified securing the unrestricted license as his top priority in September, with executives hoping for approval this year.

Regulatory Scrutiny Intensifies

The Prudential Regulation Authority is examining the strength of Revolut's control systems in both domestic and international markets before granting full banking privileges. Bank of England officials want specific commitments from the company regarding its plans to build risk management infrastructure that matches its expansion ambitions. The Financial Times obtained this information from sources it did not identify.

The regulatory review focuses on whether Revolut can maintain adequate oversight as it grows beyond Britain's borders. The company has expanded rapidly across multiple countries, raising questions about its ability to monitor operations consistently across different jurisdictions.

Revolut declined to provide comment when contacted but referred to a July statement.

In that statement, the company said it was "progressing through the final stages of mobilisation." The firm acknowledged the complexity of the process, describing it as "the largest and most complex mobilisation ever undertaken in the UK" given its global scale.

The statement emphasized patience over speed. "A thorough review is an expected part of the process and getting this right is more important than rushing to meet a specific date," the company said at the time.

The Path Forward

Co-founder and CEO Nik Storonsky told reporters in September that obtaining the full UK banking license ranks as his primary objective. The approval process has stretched across several years. Once regulators grant unrestricted authorization, Revolut plans to MOVE customers into the new banking entity and expand its product offerings to include credit.

Company executives maintain they expect final approval before the end of this year.

The Bank of England refused to comment on the matter, citing its policy against discussing individual firms. Reuters could not independently confirm the Financial Times report.

The restricted license Revolut received in 2024 represented progress after years of applications and reviews. However, the limitations prevent the company from operating with the same flexibility as established banks. Full authorization WOULD allow Revolut to compete more directly with traditional financial institutions in offering loans and other credit products to its customer base.

Understanding Banking Mobilization

Banking mobilization refers to the process financial firms undergo when transitioning from a restricted license to full banking authorization. During this phase, regulators examine whether the company has adequate systems for risk management, compliance monitoring, capital requirements and customer protection. The Prudential Regulation Authority sets strict standards for these systems to protect depositors and maintain stability in the financial sector.

Risk controls encompass the policies and procedures banks use to identify, assess and manage potential threats to their operations.

These include credit risk from loans, operational risk from internal processes, and compliance risk from regulatory violations. For a rapidly expanding fintech company like Revolut, regulators want assurance that controls remain effective as the business grows across borders.

Looking Ahead

The delay underscores the challenges fintech companies face when seeking to operate as fully licensed banks in major financial centers. Regulators maintain rigorous standards regardless of a company's technology or business model. For Revolut, the wait continues as officials evaluate whether its infrastructure can support its ambitions without compromising oversight or customer protection.