Revolut’s banking license application is reportedly set to be rejected by the Bank of England due to concerns surrounding its information technology (IT) systems. The bank’s Prudential Regulatory Authority (PRA) had previously announced its intention to issue a warning to Revolut in March following a review of the initial application. However, negotiations are now underway to salvage the application after the PRA did not follow through on its warning.
Initially, the PRA raised concerns about Revolut’s balance sheet following an audit conducted by financial services firm BDO. The audit revealed issues with how Revolut’s IT system ensured the accuracy of its revenue streams. BDO stated that flaws in the system prevented the verification of $540 million of Revolut’s revenue, including income generated from cryptocurrency trading.
In 2021, revenues from crypto trading accounted for one-third of the company’s fees. If the U.K. rejects the application, the company will be unable to offer mortgages and customer loans.
The Financial Conduct Authority (FCA) in the U.K. has taken a strict stance against crypto firms providing services to citizens. As a result, many firms have chosen to bypass U.K. registration and offer services remotely. The U.K. government attributes its anti-entrepreneurial reputation to regulatory actions. Treasury Minister Jeremy Hunt recently emphasized the importance of economic growth considerations for U.K. competition authorities, following their rejection of Microsoft’s proposed acquisition of gaming giant Activision Blizzard.
Revolut Launches Services in Australia
Revolut has expanded its offerings in Australia by launching business accounts focused on international payments. This move comes as the London-based company reportedly seeks to obtain a banking license in the country.
The firm provides a range of fiat payment services to clients in Europe and Australia, in addition to its crypto services. These crypto services include the ability to buy and sell various cryptocurrencies like Bitcoin, XRP, and Ether. In certain regions, Revolut also enables customers to participate in crypto-staking.
With the introduction of business accounts, the company enhances its existing presence in Australia, where it already offers personal accounts. Apart from traditional financial services and international transfers, these personal accounts provide access to cryptocurrency, stock, and commodity investing.