Revolut Withdraws US Banking Licence Application: What Does This Mean for the Neobank?
Revolut, one of the UK’s most valuable fintech companies, has reportedly withdrawn its application for a US banking licence. The neobank had previously stated its intention to pursue a US banking licence in order to offer a full range of financial products and services to its American customers.
In January 2021, Revolut filed a draft application with the FDIC and California’s Department of Financial Protection and Innovation. However, both regulators have confirmed that they do not have a record of receiving an application from Revolut. Similarly, a search through the files of the Office of the Comptroller of the Currency (OCC) shows no evidence of Revolut applying for a banking licence through them.
The reasons behind Revolut’s decision to withdraw its application are unclear. Some sources suggest that regulators may have indicated that the application was unlikely to be successful. Acquiring a US banking licence is notoriously challenging, especially for fintech companies. It requires meeting strict regulatory requirements and navigating a complex approval process.
Despite abandoning its US banking licence application, Revolut remains committed to serving its US customers. The neobank currently provides banking services in the US through a partnership with Metropolitan Commercial Bank. It offers core features such as debit cards and money transfers. Additionally, Revolut has expanded its services and recently launched a robo-advisor to automate investment portfolios for its customers.
Revolut has over half a million retail customers in the US and employs more than 150 people in North America. The company, which was last valued at $33 billion, has taken strategic steps to grow its presence in the US market. However, the decision not to pursue a banking licence may impact its ability to offer a full suite of financial products and services independently.
Notably, Revolut is not the only fintech company to withdraw its US banking licence application in recent years. Robinhood, Square, and Monzo have all taken similar steps. Securing a national bank charter from the OCC, as Varo Bank did in 2020, remains a significant achievement for consumer fintech companies.
While Revolut has abandoned its US banking licence application, it is still awaiting the outcome of its UK banking licence application. This development highlights the challenges fintech companies face in obtaining licences in different markets and the complexities of the regulatory landscape. Revolut Withdraws US Banking Licence Application.
Revolut’s decision not to pursue a US banking licence underscores the importance of partnerships with established banks and the ability to offer innovative financial services through collaborations. As Revolut continues to expand its global presence, it will be interesting to see how it navigates regulatory landscapes and finds alternative ways to provide comprehensive financial solutions to its customers.
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