Revolut faces fresh regulatory scrutiny around rapid product launches, FT reports

The Bank of England has ordered a review of fintech Revolut’s approval processes for new services, sources told the Financial Times. Just a day earlier, the company had launched its first credit product in the UK after receiving a banking license.

The Bank of England has issued Revolut a so-called section 166 order to assess the risks associated with its rapid launches of new financial products, the FT reports, citing sources. The order requires the company to appoint independent advisers to examine its internal systems and controls.

The process usually results in a report recommending improvements, but any rule breaches uncovered could lead to penalties or “other enforcement action,” the FT points out. The FT previously reported that the Bank of England had delayed granting the neobank a license over concerns about whether its risk controls could keep pace with the rapid expansion of its overseas operations. Revolut and the Bank of England declined to comment to the FT. 

As the FT reported in June, Revolut had received a similar order from the European Central Bank a year earlier. The regulator ordered a review and imposed additional restrictions on the start-up over concerns about how quickly it approved new financial product launches, the FT reported at the time.

CEO Nik Storonsky has described employees given considerable freedom to develop and launch products as “self-guided missiles,” the FT noted. “They press the button and they reach the goals themselves,” he said.

In little more than a decade, Revolut has attracted more than 80 million customers and reached a valuation of $115 billion. The company is already worth more than three of the UK’s four largest traditional banks.

The neobank received its UK license in March after years of waiting. Approval was seen as crucial to fulfilling Revolut’s ambition of expanding from 40 to 70 countries by 2030, the FT writes. It allowed the company to take deposits and enter traditional lending markets. On Monday, Revolut announced the launch of unsecured personal loans ranging from GBP2,000 to GBP25,000 in the UK.