Revolut’s UK licence delay: caution or stagnation?

The Paypers takes a deep dive into Revolut’s prolonged journey toward securing a UK banking licence, exploring the implications of the delay and its impact on the broader fintech landscape. 

Nearly a year ago, in July 2024, Revolut made a major announcement: it had secured a UK banking licence after a three-year wait. However, the multinational neobank and fintech company did not obtain the full authorisation, only entering the ‘mobilisation’ stage, which imposed several restrictions on its operations and was set to last a minimum of 12 months.

Fast forward to late July 2025, and those 12 months have passed in the blink of an eye, even though Revolut’s full banking licence in the UK hasn’t yet followed. Reportedly, the company is facing difficulties in completing the final stage of the UK banking licence process. Additionally, Revolut’s global scale, with over 10 million UK customers at the time of its licence application, is widely viewed as one of the main obstacles in this process, as the company is the largest entity to undergo this particular authorisation path.

On top of everything, on 30 July 2025, tensions emerged publicly, with Bank of England (BoE) Governor Andrew Bailey intervening to halt a meeting that Chancellor Rachel Reeves had attempted to arrange between financial regulators and Revolut. The Chancellor, who strives to make Revolut a fully authorised bank as soon as possible, had tried to organise a meeting with Treasury officials, the company, and the BoE’s Prudential Regulation Authority (PRA), aiming to discuss the firm’s goal to become a UK financial institution.

In an unexpected turn of events, the meeting was cancelled, as the Governor intervened, citing concerns that Revolut’s regulation should be independent of political involvement. Additionally, Andrew Bailey has previously expressed dissatisfaction regarding some of Reeves’ objectives to optimise City regulation, including his caution about the possible risks of getting carried away with reforming rules that forced UK banks to separate their retail and investment banking activities.  

Opinions across the sector are split down the middle. Some say that the Governor is hyper-cautious, positioning themselves on the Chancellor’s side due to Revolut’s scale and the need for the UK to welcome more players and foster competition in the market. Others see Reeves as having no grounds for intervening in favour of Revolut and should only focus on making the UK IPO environment more fintech-friendly, without interfering with bank regulation.

The question now is how more delays, or even a possible denial, could affect both Revolut and the fintech sector at large?

Beyond approval: what’s at stake for Revolut and the UK?

The perks of being licensed

Moving forward with obtaining the UK banking licence would position Revolut at a significant advantage. Above all, the company would go under the Financial Services Compensation Scheme (FSCS) protection, which, in case of failure, would provide its customers with compensation. The FSCS covers deposits up to GBP 85,000 per depositor in banks, building societies, and credit unions, but it’s currently considering raising this protection limit to GBP 110,000. However, a Revolut spokesperson told us that, in the meantime, the company ‘takes extensive measures to keep its customers’ money safe. As a regulated e-money institution, Revolut uses a process called safeguarding, where 100% of customer funds are held in segregated accounts at its partner banks. This means the money is ring-fenced from the company’s own finances. In the unlikely event that Revolut were to become insolvent, the money in these accounts would be used to pay out to its customers before anyone else. Safeguarding rules only apply to customers' e-money accounts. They don’t apply to money put in a user’s Revolut Savings Vault - that money is deposited with a third-party bank, which holds it on their behalf and is FSCS protected. Revolut uses a range of robust features to protect customers’ money and personal data, including Strict identity checks, Biometric security, Gambling blocks, Disposable virtual cards, and more.’

Additionally, Revolut would be able to provide credit products in the UK, enabling it to expand its presence into the consumer lending space. After securing the full banking licence, the company could launch credit cards, personal loans, and mortgages in its home market, thus further scaling its capabilities and offering for its users.

Even if Revolut is a widely known company, operating in 48 countries and territories, including the EEA, Australia, Japan, and Singapore, among others, receiving the UK banking licence would further boost its reputation. Obtaining such authorisation from regulators would increase the trust in the company, as consumers may tend not to utilise services from a firm operating without a banking licence. This milestone would also establish a route towards Revolut’s expansion on the other side of the pond, namely the US, after the company secured an EU banking licence through Lithuania.

Strategic gains for the UK

We have covered what is in store for Revolut after receiving the licence, but what about the UK fintech landscape as a whole? Mainly, the sector would be able to retain more fintech champions, with the probability for them to leave the country for a more suitable and welcoming region being less likely. This would lead to a boost in competitiveness, with more companies looking to expand their offering, launch more products to the market, and thus better serve the needs of Brits.

On top of this, the UK would risk losing listings and headquarters to other countries, with Revolut already naming Paris as its new Western European HQ, citing regulatory clarity as a key factor in this decision. Also, the UK IPO market is in hot water, with heightened geopolitical turmoil continuing to decrease activity. The London Stock Exchange saw only nine listings in the first half of 2025, raising GBP 182.8 million in total, a 64% year-over-year drop in deal value from GBP 513.8 million in H1 2024. However, if regulators were to support the fintech sector through transparent and concise requirements, the ecosystem could continue to scale and maintain the UK’s position as a fintech hub.

But how can more fintech companies become licensed as a bank in the UK? Let’s dive in.

From application to approval: the UK process

First and foremost, the BoE makes it clear that any company looking to set up a bank must be fully prepared, motivated, and structurally organised. The financial institution also highlights its focus on positive regulatory relationships with all firms, stating open and constructive dialogue as a key component of the licensing process.

In addition to the BoE’s assessment of a company’s new bank application, further optional stages of pre-application and mobilisation are included. The pre-application process comes as an elective step comprising three meetings, where companies engage with the regulator to develop their proposition and prepare their application to set up a new bank. Following this, firms need to submit an application for the BoE to assess and decide whether to authorise them or not, with the PRA or the Financial Conduct Authority (FCA) leading these evaluations. Meanwhile, firms are advised to start developing their operational capabilities. According to BDO, on average, applicants spend 12 to 24 months preparing for the ultimate application submission, which is followed by a regulatory review period of up to 12 months.

And now, to the step where Revolut got stuck. The mobilisation stage, which is an optional authorisation stage, allows new banks to operate with deposit restrictions of GBP 50,000 while they complete their set-up before fully starting to trade. Companies oversee the completion of mobilisation actions and operational capabilities, while the PRA or FCA lead on the assessment of whether the firm is prepared to exit this step and become fully operational. The BoE underlines that mobilisation could range from as little as a few months to continue indefinitely and should take no longer than 12 months.

Mobilisation is a rather common industry process, with several other banks going through it. These include Monzo, Starling, Atom Bank, Zopa Bank, GB Bank, and Kroo. So, Revolut is not alone in this.

Revolut vs. rulebook

Therefore, as it can be deduced until now, Revolut’s journey to a banking licence has been nothing short of a marathon. The fintech arrived at the starting point as one of the largest firms to ever attempt this kind of authorisation, with roughly half a million UK customers already on board. And, while legacy banks had decades to perfect their compliance systems, Revolut had to figure it out in real time.

One of the first hurdles? Compliance and governance complexity. Revolut had to show it could run like a proper bank: rolling out rock-solid governance systems that could pass the PRA and FCA checks. For a firm built on agility and tech-first thinking, this might’ve been a clash of cultures.

Next up: capital adequacy and operational system buildouts. Unlike e-money institutions, banks must maintain capital reserves to cushion against financial shocks. For Revolut, this meant not just holding the right balance of capital but also ensuring that operational systems could reliably monitor, report, and manage those reserves.

Talent acquisition for regulated banking roles presented another unique challenge. Revolut had to bring in senior executives with deep experience in regulated banking: people who could bridge the gap between a nimble fintech culture and the heavy requirements of UK regulators. Hiring for these roles isn’t just about credentials; it’s about trust and the ability to lead a company under intense regulatory scrutiny.

Moreover, Revolut’s decision to swap BDO for EY as its auditor was more than just a name change on paper. But EY’s involvement doesn’t erase the shadows of past controversies, since Revolut has faced its share of public scrutiny: from compliance questions in other markets to high-profile management shakeups. Each incident, whether substantiated or speculative, adds a layer of pressure when proving readiness for banking status. Regulators don’t just look at processes on paper; they also assess how a company responds to crises, manages risk, and maintains trust.

Politics shaping Revolut’s banking journey

Revolut’s UK banking licence journey hasn’t just been about systems, audits, and compliance checklists; it’s also played out against a political backdrop that has influenced both strategy and perception. CEO Nikolay Storonsky hasn’t been shy about voicing his frustrations, openly criticising London’s listing and regulatory framework, signalling to the market and regulators that Revolut was pushing the boundaries of what fintechs could expect from the City.

At the heart of this tension lies a delicate balance between financial stability and fintech innovation. Regulators are under pressure to protect consumers and the broader financial system, but they also want to encourage the growth of next-gen financial services. For Revolut, this balancing act has been very real: it’s one thing to scale rapidly and innovate in payments, lending, and crypto, and another to convince regulators that your approach won’t introduce systemic risks. 

Revolut chose to establish its Western European hub in Paris due to the market’s regulatory clarity and predictable framework. However, this decision does not reduce the company’s commitment to the UK: its Global HQ remains in London, and Revolut continues to expand operations, drive innovation, and invest in the UK market.

Finally, there’s the investor perception and market confidence angle. Fintechs aren’t evaluated purely on product innovation – they’re also measured by how well they navigate politics, regulations, and public perception. Storonsky’s critiques, combined with strategic HQ choices, may be part of a larger effort to maintain investor trust. After all, public scrutiny over banking licences can ripple through fundraising rounds, share valuations, and even talent acquisition. In a sector where hype can fuel growth but missteps can trigger scepticism, demonstrating political savvy became as important as demonstrating technical capability.

Brexit bumps – navigating the regulatory maze

Revolut’s journey to full banking status is complicated by yet another unavoidable reality: Brexit changed the rules of the game.

Before the UK’s exit from the EU, a single banking licence granted in one EU member state could be 'passported' across the bloc, including the UK. That meant a fintech like Revolut could, in theory, operate across borders under one regulatory umbrella. But post-Brexit, the UK and EU regulatory environments have become separate ecosystems. As a result, Revolut’s EU banking licence doesn’t automatically unlock access to a full UK licence. Instead, the company has to go through a parallel authorisation process in London.

The EU framework offers regulatory clarity and consistency, which makes it easier to expand products like lending and deposits across multiple markets. For a fintech with global ambitions, this is a major win. But the UK, one of Revolut’s core markets, wasn’t covered. And that’s where the challenge begins. The BoE and the FCA expect applicants not just to meet the letter of the law, but to show a track record of prudence, transparency, and readiness for full integration into the UK financial system.

These regulatory differences directly shape Revolut’s expansion strategy. In the EU, Revolut can roll out services with relative consistency, scaling across borders under one licence. In the UK, every new product and operational system must be squared with regulators under a stricter national regime.

The divergence also has a symbolic weight. The EU licence demonstrated that Revolut could play by the rules in one of the most structured regulatory environments in the world. But the UK licence is seen as another badge of credibility, especially for investors and customers in Revolut’s home market.

Final thoughts

If Revolut successfully navigates the mobilisation phase and achieves full authorisation, it would be able to offer a comprehensive suite of banking services, including current accounts, overdrafts, and loans, directly to UK customers. This progression would improve its credibility and competitive edge in the UK market.

Should delays persist, Revolut may face challenges in its UK expansion plans. Prolonged restrictions could hinder its ability to fully integrate into the UK banking system, potentially affecting its market share and customer acquisition efforts.

Strategic implications

The outcome of Revolut's UK banking licence process could have effects across its global operations:

• UK market: full authorisation would solidify Revolut's position in the UK's digital banking landscape. Extended delays could necessitate a strategic pivot, potentially impacting its market share.
• EU market: Revolut's EU banking licence provides a stable foundation for continued expansion across European markets, allowing for consistent service offerings.
• US market: a successful UK authorisation could serve as a strong signal to US regulators, potentially facilitating smoother entry into the American market.

Balancing innovation and stability

The UK's regulatory framework aims to balance innovation with financial stability. While this approach ensures robust oversight, it can also pose challenges for rapidly growing fintechs like Revolut. The question remains: can the UK maintain its status as a fintech hub while upholding stringent banking regulations?

Revolut's experience underscores the delicate balance regulators must strike. As the fintech landscape continues to evolve, the UK's ability to adapt its regulatory approach will be crucial in fostering innovation without compromising stability.

About Claudia Pincovski 

Claudia is a News Lead Editor at The Paypers. Holding a bachelor’s degree in Journalism, she is very passionate about exploring the latest news on financial inclusion, financial literacy, digital banking, and Open Finance. Claudia is a diligent researcher, a meticulous editor, and an active advocate for diversity and inclusion.

About Iulia Mușat

Iulia is a Junior News Editor at The Paypers, predominantly focusing on fraud prevention, financial inclusion, and online payments. With an interest in discovering the latest trends in financial security and payment solutions, Iulia is eager to bring insightful news that keeps readers updated with the current advancements in the financial landscape.