Revolut Needs to Get Its House in Order | EUROtoday

For a second yr operating, Revolut, the jewel in the UK’s fintech crown, will fail to file its annual accounts on time. It’s not an excellent look.

Since it launched in 2015, Revolut has grown shortly to 6,000 workers and 25 million prospects. In pursuit of a “one app, all things money” imaginative and prescient, it has expanded its product suite aggressively too, pushing into companies like crypto buying and selling and worldwide cash switch, and incomes the “neobank” moniker. In 2021, Revolut secured a $33 billion valuation, and earlier this yr it introduced its first ever yr of profitability.

But it has suffered a number of unflattering setbacks too; from an exodus of executives to late financials, expensive cyber incidents, and studies of excessive workers turnover and unhealthy work local weather printed in WIRED. When Revolut ultimately filed its final set of accounts in March, six months late, there was a catch: Its auditor, BDO, couldn’t confirm with certainty three-quarters of its revenues—£476.9 million ($591.6 million)—due to issues with its IT practices. Another delayed monetary audit was the very last thing it wanted.

Though Revolut declined to touch upon the report, it has reportedly attributed the delay to a lag in its audit course of brought on by the lateness of the earlier set of accounts. That “sounds like a weak excuse,” says Shaul David, a former banker, fintech government, and adviser to the UK authorities. “Revolut has had a long series of own-goals—and the latest delay is just another one.”

Word that Revolut will miss its deadline will trigger “tongues to wag” over again, says Simon Jaquiss, a veteran banker, beforehand of Standard Chartered and Citibank. And hypothesis about dysfunction at Revolut, he says, might be unhealthy for enterprise. For greater than two years, the agency has tried to persuade the Prudential Regulation Authority (PRA), the physique that supervises UK banks, that it’s worthy of a UK banking license. A license would permit Revolut to broaden past low-margin cash transmission companies, into lending merchandise like mortgages, bank cards, and enterprise loans. It would additionally find a way to supply prospects regulator-insured deposits, just like the banks do.

Without a UK banking license, says Ruth Wandhöfer, an writer and fintech advisor—who helped negotiate the phrases of the EU funds laws that opened the door to fintechs like Revolut—the corporate would have to utterly rethink its development technique. There could be a “whole ecosystem of financial products” the agency wouldn’t find a way to supply, she says. “Basically, you’re not participating in the real action.”

Under a separate license issued by the Bank of Lithuania, Revolut is ready to function as a financial institution throughout the EU and presently offers banking companies in 28 EU international locations. But the UK is by far its largest market—and a UK banking license, seen as a gold normal worldwide, would open doorways to new territories, like Australia and the US. It’s a vital piece of the puzzle, however one which may rely upon Revolut’s potential to higher mission the sense that its home is in order.