Revolut is close to a UK banking licence: here’s what comes next

After four years of applications, regulatory back-and-forth, and an extended mobilisation period that has broken UK records for its length, Revolut is finally close to securing a full banking licence in its home market.

The Financial Times reported Wednesday that the approval is imminent, a milestone that would end a process that began in 2021 and has been watched closely across Europe's fintech sector.

Revolut already serves more than 70 million customers across 40 markets and was valued at $75 billion as recently as November.

But operating without a full UK banking licence has been a genuine constraint, one that a full approval would begin to lift.

The question now is not whether the licence arrives. It is what happens the moment it does.

Lending becomes the next growth engine

Right now, Revolut's UK banking division operates under strict limits.

During the so-called mobilisation phase, a transitional period in which a newly licensed bank builds out its systems before receiving full authorisation, the company can hold no more than £50,000 in total customer deposits.

That restriction alone illustrates how much ground is still to be covered.

A full licence changes that entirely.

Revolut would be free to accept customer deposits at scale, which matters because deposits are cheap funding.

Traditional banks use customer savings to fund the loans they issue, a model that is far more profitable than charging subscription fees or earning a small percentage on card transactions.

That is the model Revolut has been locked out of in the UK, and the one it would now be able to build.

Lending, which includes personal loans, credit products, and potentially mortgages over time, is the most profitable segment in retail banking.

It would significantly shift Revolut's revenue mix and earnings profile.

It would also put the company in direct competition with Barclays, Lloyds, and the digital challenger banks that have spent years building UK lending businesses.

The fintech era of payments and budgeting apps is not over, but the next stage is full-service banking, and Revolut is now at the door.

The regulatory trade-off

The length of the process tells you something important.

Prudential Regulation Authority (PRTA), the arm of the Bank of England that oversees UK banks, has not been slow, but cautious.

Regulators raised concerns about whether Revolut's risk controls could keep pace with its rapid international expansion.

They requested stronger assurances on compliance systems, capital management, and IT infrastructure before granting full authorisation.

The mobilisation phase, which typically lasts around 12 months, stretched well beyond 18 months for Revolut, the longest such period for a newly licensed UK bank.

Full authorisation means full accountability.

Revolut would be subject to capital requirements, rules that dictate how much financial buffer a bank must hold against potential losses, as well as regular stress tests and stricter governance standards.

Becoming a bank means trading speed for credibility. Revolut gains legitimacy and access to the UK financial system.

In return, it operates under the same scrutiny applied to any institution holding people's savings.