Revolut’s rise has been dazzling. In less than a decade the London-based fintech has amassed more than 65mn users across 38 markets, offering everything from multicurrency accounts and stock trading to crypto and instant payments.
Yet for all its global swagger, Revolut still lacks one crucial badge of legitimacy at home: a full UK banking licence.
The Prudential Regulation Authority’s reluctance to grant that approval has become a parable for the uneasy marriage between financial innovation and regulation. Revolut wants to be treated like a bank. The regulator fears that it already behaves too much like one without the corresponding guardrails.
PRA’s caution is understandable
GlobalData’s Joanne Kumire notes that Revolut has “scaled 5,000 per cent in a few years”, operating simultaneously across dozens of markets. Traditional lenders grew slowly, layering risk and compliance frameworks over decades.
The PRA’s rulebook was written for that world — local branches, predictable transaction volumes, human oversight. Revolut’s model is the opposite: software-led, borderless, and operating at algorithmic speed. The regulator’s caution is understandable.
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A UK banking licence would allow Revolut to take deposits and lend fully under domestic supervision, bringing customers the comfort of FSCS deposit protection. It would also cement its position against incumbents such as Lloyds or NatWest. But it would expose the PRA to the reputational risk of licensing a group whose internal systems and risk management have not yet been tested through a full credit cycle.
The central dilemma is not just about Revolut. It is about how regulators measure resilience in a world where financial services increasingly run on code rather than branches. Traditional banks rely on historic data and hierarchical control. Digital banks depend on real-time monitoring, API-driven compliance, and a level of data complexity that would have baffled 20th-century supervisors.
Maybe this is about the regulator?
If regulators continue to assess fintechs through a legacy lens — focusing on linear growth, physical presence and incremental risk accumulation — they will always appear unready. Yet rewriting the playbook too quickly carries its own dangers. A systemic failure in a high-velocity digital bank could spread faster than any run on a high street lender.
For Revolut, the licence delay is costly. It constrains product expansion, restricts lending and limits profitability. For the UK, it is a reputational test. London still aspires to be a global fintech hub. Prolonged regulatory gridlock risks pushing tomorrow’s Revoluts to Dublin, Vilnius or Berlin, where digital banks have faced more accommodating regimes.
So what’s the answer for Revolut?
The answer lies somewhere between enthusiasm and restraint. Regulators must develop tools to assess real-time operational resilience and cyber-risk, while firms such as Revolut must learn that scale does not guarantee trust.
Kumire puts it bluntly: “Revolut isn’t a start-up testing the waters; it’s a global institution asking the UK to catch up.”
The PRA’s eventual decision will echo beyond Canary Wharf. Whether Revolut is waved through or held back will shape not only its future but the boundaries of digital banking regulation itself.
