The founder of fintech giant Revolut has criticised the Financial Conduct Authority (FCA) over the firm’s “slower than expectation” progress towards a banking licence.
Nikolay Storonsky, who co-founded London-headquartered Revolut in 2015, has long signalled his intention to win a banking licence in the UK and touted it as key to gaining consumer trust. But despite holding a European Central Banking licence in 10 European countries, full licences in the UK and US have not been forthcoming.
In an interview with City A.M., Storonsky said that progress on a banking licence application in the UK had been slow and regulators had lagged behind their international counterparts.
“I definitely see the process is slower compared to other regulators,” he said. “I’ll give you an example – so we applied for 48 licences across the globe and we received 44, and three of the licences that we haven’t received are actually in the UK.”
Consent for a full licence is needed from both the Prudential Regulation Authority (PRA), which supervises the capital requirements of banks, and the FCA, which focuses primarily on protecting consumers and the integrity of the financial system. The two regulators work together to grant new licences in the UK, with the PRA requiring the consent of the FCA to authorise any new bank.
But Storonsky claimed that Revolut had completed its process with PRA and said “the FCA process is a bit delayed.”
“Then you can hear in the media, all kinds of news about FCA – I think they’re experiencing some kind of short staff. As a result the setup process on their sides is slower compared to expectations,” he said.
He added that it may be beneficial for certain KPIs to be put in place at the regulator, as well as “stricter timelines”, more people or “more efficient people”.
In a statement to City A.M. yesterday, an FCA spokesperson said that while it did not comment on individual cases, it reviews “banking applications to ensure they meet the standards we expect”.
“These include ensuring that those who run firms are fit and proper, the business model is sustainable and viable, we understand the impact of the products and services (both regulated and unregulated) that the firm intends to provide and that the firm has adequate systems to identify and prevent flows of money from crime,” the spokesperson added.
The watchdog also stressed it had “successfully recruited across the organisation” to meet its “expanding remit”, including bringing in over 200 new colleagues in the first three months of this year.
Storonsky has spoken previously about the importance of winning a full licence for Revolut to win the trust of consumers, telling a conference last year that “a lot of customers trust banks rather than fintechs”.
The 37-year-old British-Russian founder also reportedly quizzed the chancellor Rishi Sunak at a city event in February, asking what had caused the delays to the licence application.
It comes as Revolut looks to pass a separate roadblock and gain fully registered status for crypto services from the FCA, after being held on a temporary register alongside Copper and CEX.IO, with 35 firms already being granted full approval by the watchdog.
The extended timelines have proved a hiccup in Revolut’s rapid global expansion, which has seen it snap up 18m customers globally since 2015 and fetch a valuation of $33bn in its latest funding round – more than NatWest.