Revolut ordered to fix

Revolut faced a regulatory slap-down from the European Central Bank last year as restrictions were placed on its operations in the continent.

Europe’s most valuable fintech company had its permission to release new products across the 27 countries covered in the European Economic Area temporarily suspended last summer.

The bank was instructed to rectify “deficiencies” in its approval process in Europe, according to the Financial Times, with the central bank ordering a third party review of its risk, compliance and legal functions for new launches in Europe.

The European arm of the London-based fintech giant was also blocked from making acquisitions or accepting new customers beyond the continent as part of the restrictions.

A spokesperson for Revolut said: “We are in continuous and constructive dialogue with our regulators, including the European Central Bank, as part of our normal course of operations as a fully licensed bank. 

“Revolut is committed to the highest standards of governance and risk management. In line with supervisory expectations, we regularly strengthen our internal control environment and operational processes.”

The digital bank secured its European specialised banking licence from the Bank of Lithuania in 2018. It later upgraded to a full European banking licence in 2021. 

In the last year, it has launched mortgages and teen accounts across Europe as well as opening the doors to its first physical store in Barcelona. It’s understood that Revolut Bank UAB – the official title of its European entity – has conducted a number of improvements to its internal product launch process over the last year, including beefing up the review process with internal experts and bank governing bodies. 

As part of the ECB restrictions, the FT reported Revolut was ordered to review staffing levels, skills, competencies and independence of its approvals. 

The fast-growing pace of Revolut turned heads across the global banking sector, with the firm notching a $75bn price tag and over 75m customers worldwide. The firm is reported to be eyeing a $200bn valuation for its long-awaited IPO.

In the UK it has, faced its own regulatory headache in the past, not least in the pursuit of a full-fat UK banking licence that took four years to clinch. The licence was reported to be held up due to concerns from the watchdog over the bank’s global risk controls and the sheer scale of the so-called mobilisation effort.

Revolut’s revenue soared 46 per cent in the last year to £4.5bn as its diversified balance sheet delivered hefty returns.

Subscriptions revenue grew 67 per cent to £708m, whilst card payments was up 45 per cent to £1bn and wealth 31 per cent to £663m.