The flaws include a high risk of material misstatement and, according to the Financial Reporting Council (FRC), can risk undetected material misstatement. The payments group has continued its rapid expansion on the European market in the past few months but also suffered from a series of high-level defections in its risk and compliance teams, leading regulators to fear the future of its over 7 million users across the UK and Europe.
UK’s watchdog also revealed deficiencies in how Revolut’s payment processes were tested by the BDO, one of the country’s largest audit companies by revenue, which could have led to compromised results in the audit and, therefore, pose an unrefined picture of the fintech. However, BDO’s latest attempt for a more rigorous approach of Revolut’s working mode might lead to delays in filing accounts for key Revolut subsidiaries.
The group’s parent company was set to file accounts by the end of September 2022, overdue since June 2022 by the Revolut NewCo UK, the entity that houses the banking license applied for the fintech in the UK. Other UK subsidiaries of the digital bank, including its digital assets and travelling branches, are also due to file at the end of September 2022.
And even though delays in filing accounts are seldomly punished in the kingdom, it could lead to the prosecution of its company directors and civil penalties against the company, under the British laws.
Currently, Revolut is undergoing an extreme makeover that started with the implementation of new cards and a changed app interface to enhance UX and become a more customer-friendly fintech. However, it must still improve its back office to start working as a bank and become known as a bank rather than an instant money transfer app.
The company is Europe’s second most valuable private fintech, at a market valuation of over USD 33 billion and more than USD 800 million raised in funding rounds led by SoftBank and Tiger Global in 2021. It is still waiting for its banking license in the UK but has received a similar license for operation in several countries across the EU.
Finally, Revolut is also the last fintech to apply and awaiting permanent approval by the FCA to offer crypto-related services in the UK.
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