Revolut has reportedly been weighing the possibility of buying a US lender in a bid to get an American banking licence more rapidly.
Body Text: Following this announcement, according to Financial Times, the initiative comes as the UK fintech continues to wait to clinch a similar accreditation in its home country.
In addition, the acquisition would give Revolut the capability to expand in the US more quickly than if it were to apply for a banking charter by itself, as the fintech will focus on choosing a potential target that already holds a national licence.
More information on Revolut’s strategy of development
As the US market currently provides access to fresh clients and customers, as well as potentially significant deposits at a time when many British fintech companies are attracting users at a slower rate, Revolut represents one of the several European firms that aim to expand in the landscape. Revolut has made no firm decision in the process of acquiring a US bank, while also considering the process of applying for a banking licence in its own right. The fintech has reportedly also considered similar plans to buy a Middle Eastern financial institution as part of its global development strategy.
Revolut obtained its UK banking licence in July 2024, after a 3-year wait. In order to be able to finalise its banking operations before launching in full, Revolut needed to enter the ‘mobilisation’ stage, also known as authorisation with restrictions. This meant that customers and clients were not set to experience any service disruptions, while also being able to use their Revolut accounts as usual.
During 'mobilisation', authorised banks are usually limited to holding GBP 50,000 in total customer deposits. Until the completion of this stage and the official launch of the UK bank, Revolut’s UK customers were set to continue to be served by Revolut Ltd, a UK e-money institution regulated by the FCA, with funds protected according to the Electronic Money Regulations 2011. Revolut is yet to gain authorisation to operate as a fully fledged bank in the UK.
