Up next in 10
After years of scrutiny and regulatory wrangling, Revolut has finally secured its UK banking licence. On one level, it’s just another regulatory milestone on a long and interesting journey.
On another, it marks the moment when an insurgent fintech disruptor becomes something much bigger: a fully-fledged bank in its home market.
City AM Editor-in-Chief Christian May has all the analysis in this instalment of Week in Business.
Get more of City AM 👇
🌐 http://www.cityam.com
X(formerly Twitter): http://twitter.com/CityAM
Facebook: http://www.facebook.com/cityam
Instagram: http://www.instagram.com/city_am
LinkedIn: http://www.linkedin.com/company/cityam
#news #business #banking #revolut #finance
Show More Show Less View Video Transcript
0:00
There hasn't been much good news around
0:01
lately, between the UK's miserable
0:03
growth trajectory, war in the Middle
0:04
East, and the whiff of decay in Downing
0:07
Street. It's been hard to find the
0:08
optimism. But when something genuinely
0:10
impressive happens in British business,
0:12
it's worth pausing to take notice. And
0:15
this week, we had exactly that. So,
0:17
welcome to the week in business with me,
0:19
Christian May.
0:23
After years of scrutiny and regulatory
0:26
wrangling, Revolut has finally secured
0:28
its UK banking license. Now, on one
0:30
level, it's just another regulatory
0:32
milestone. On another, it marks the
0:34
moment when an insurgent fintech
0:36
disruptor becomes something much bigger,
0:38
a fully fledged bank in its home market.
0:42
For a company that began less than a
0:43
decade ago with a simple travel card and
0:46
a bold idea about how finance could work
0:48
differently, it's an extraordinary
0:50
achievement. The numbers alone are
0:52
remarkable. Revolut now serves tens of
0:54
millions of customers globally,
0:56
processes billions in transactions, and
0:58
has evolved from a payments app into a
1:00
sprawling financial platform, offering
1:02
everything from savings and investments
1:04
to crypto trading and business banking.
1:07
Along the way, it has become one of the
1:09
most valuable fintech companies in the
1:11
world with a $75 billion valuation.
1:15
That transformation hasn't always been
1:16
smooth. Like many high-growth firms,
1:19
Revolut has faced questions about
1:20
governance, culture, and regulation.
1:22
That's what happens when you're building
1:24
the plane as it taxis on the runway.
1:26
Well, now it's taken off, and we should
1:28
recognize the sheer scale of what it has
1:31
built. At a time when Britain is
1:33
suffering from a doom loop narrative, a
1:35
narrative I know I contribute to from
1:37
time to time, Revolut stands out as a
1:39
reminder that this country can still
1:41
produce world-class companies. In fact,
1:44
Revolut tells us something important
1:45
about the potential of the UK tech
1:47
sector. Britain has many of the
1:49
ingredients required to produce these
1:51
global tech champions. We have
1:53
world-leading universities, deep pools
1:55
of talent, sophisticated financial
1:57
markets, and a long tradition of
1:59
entrepreneurial risk taking. And every
2:01
so often a company emerges that brings
2:03
those ingredients together in
2:05
spectacular fashion, and Revolut is one
2:07
of them. It joins a small but
2:09
significant group of British tech firms
2:11
that have achieved global scale.
2:13
Companies like ARM, Darktrace, and Wise
2:16
showing that the UK can compete at the
2:18
highest level of the digital economy.
2:21
Which brings us to the slightly
2:23
uncomfortable question, and
2:24
uncomfortable reality in fact. ARM opted
2:27
for a US listing over the UK. Darktrace
2:30
was taken private out of London by US
2:32
private equity, and Wise has one foot
2:35
out the door with its dual US listing.
2:37
If Revolut eventually lists on the stock
2:39
market, where will that listing take
2:41
place? The honest answer is that it
2:43
probably won't be in London. For
2:45
fast-growing tech firms, New York
2:46
remains a far deeper and more liquid
2:48
market with a larger pool of specialist
2:50
investors and typically far higher
2:52
valuations.
2:54
From the company's perspective, listing
2:56
in the US may simply be a case of
2:57
commercial good sense, but from
2:58
Britain's perspective, the prospect of
3:01
yet another homegrown tech success story
3:03
choosing to list elsewhere is difficult
3:05
to ignore if that should come to pass.
3:08
Public markets play a critical role in
3:10
financing growth companies, creating
3:12
wealth, and ensuring that successful
3:13
firms remain connected to the domestic
3:16
economy even as they expand around the
3:17
world. If Britain consistently produces
3:20
innovative companies but fails to host
3:22
their listings, then we risk becoming a
3:23
place where great businesses are born
3:26
but not retained. That is why policy
3:28
makers and regulators have spent the
3:30
past few years trying to revitalize the
3:32
London Stock Exchange, reforming listing
3:34
rules, encouraging pension funds to
3:35
invest more in growth companies, and
3:37
attempting to rebuild the pipeline of
3:39
IPOs. Revolut's eventual decision will
3:42
be another test of whether those efforts
3:44
are working. For now though, the bigger
3:46
story is the success itself. Whatever
3:49
happens with the future IPO, Revolut
3:51
represents a remarkable British business
3:53
success story. A startup launched in
3:55
London has grown into a global financial
3:57
platform serving millions of customers
3:59
and challenging some of the most
4:01
established institutions in banking.
4:03
Armed with its banking license, it can
4:05
now stand alongside the high street
4:07
giants in the lending and mortgage
4:09
market. That is something worth
4:10
acknowledging and celebrating, even if
4:13
for the UK's traditional banks, it's a
4:14
moment that suggests their dominance
4:16
cannot be taken for granted. Revolut's
4:19
success also reminds us that when the
4:21
conditions are right, Britain is still
4:23
capable of producing companies that
4:24
reshape entire industries. And in a week
4:27
dominated by economic pessimism, that is
4:30
a message worth remembering. And that's
4:33
it for me this week. Stay up to date and
4:35
in the know with the City AM app and on
4:37
cityam.com and I will see you next week.
4:39
Hopefully, I'll have a bit more good
4:41
news then.
Business & Industrial
Banking
News
Business News