British financial technology startup, Revolut, is looking to obtain a European banking license. The firm has raised more than $86 million in venture capital as it aims to expand its app-based service to new markets.
Currently, Revolut is a financial services firm which has offered a prepaid cash card since 2015. Now, it is hoping to obtain a formal banking license which will enable it to offer more services to its customers. With the new banking license, it would be able to provide deposit and credit services, including overdrafts, personal loans, and deposits held at a fixed term. In addition to that, customers would be able to deposit savings up to 100,000 euros under EU protections.
There is a growing network of neobanks in Europe that are trying to acquire new clients from the traditional retail banks with features such as slick mobile apps, budgeting tools, and low fee or no fee services. The changes which have come into force in Britain and across the European Union requires banks to open their closely guarded customer data to their rivals, who will be able to use it to build products and better target clients.
The London-based startup was started in 2015 by Nikolay Storonsky and Vlad Yatsenko. The firm currently supports spending and ATM withdrawals in 120 currencies and permits sending in 26 currencies directly from the mobile app. Their app also allows customers to open a current account in 60 seconds which also includes a pre-paid contactless MasterCard debit card. Revolut currently has 950,000 users currently and has processed more than $6 billion worth of transactions since its inception
“Revolut is aggressively expanding its product range and geographic areas of operation. As a global financial services institution, we’ve accepted that we operate in a highly regulated environment where consumer protection and trust are paramount,” CEO and cofounder Nikolay Storonsky told CNBC in an email Monday.
“As such, we’re embracing the higher regulatory and reporting burden associated with running a bank, as an inevitable consequence of building trust in our brand. We know we’ll be held to a very high standard of service and are prepared to demonstrate our ability to meet that challenge.”
Some banks which have already acquired this license are Germany’s Fidor Bank and N26, which recently expanded to the U.K., London-based Monzo, and Britain’s Starling Bank along with more than a dozen others.