For a second yr operating, Revolut, the jewel within the UK’s fintech crown, will fail to file its annual accounts on time. It’s not a superb look.
Because it launched in 2015, Revolut has grown rapidly to six,000 employees and 25 million clients. In pursuit of a “one app, all issues cash” imaginative and prescient, it has expanded its product suite aggressively too, pushing into companies like crypto buying and selling and worldwide cash switch, and incomes the “neobank” moniker. In 2021, Revolut secured a $33 billion valuation, and earlier this yr it announced its first ever yr of profitability.
Nevertheless it has suffered a number of unflattering setbacks too; from an exodus of executives to late financials, costly cyber incidents, and reviews of high staff turnover and unhealthy work climate printed in WIRED. When Revolut finally filed its final set of accounts in March, six months late, there was a catch: Its auditor, BDO, couldn’t confirm with certainty three-quarters of its revenues—£476.9 million ($591.6 million)—due to issues with its IT practices. One other delayed monetary audit was the very last thing it wanted.
Although Revolut declined to touch upon the document, it has reportedly attributed the delay to a lag in its audit course of brought on by the lateness of the earlier set of accounts. That “appears like a weak excuse,” says Shaul David, a former banker, fintech govt, and adviser to the UK authorities. “Revolut has had an extended collection of own-goals—and the most recent delay is simply one other one.”
Phrase that Revolut will miss its deadline will trigger “tongues to wag” another time, says Simon Jaquiss, a veteran banker, beforehand of Customary Chartered and Citibank. And hypothesis about dysfunction at Revolut, he says, could possibly be unhealthy for enterprise. For greater than two years, the agency has tried to persuade the Prudential Regulation Authority (PRA), the physique that supervises UK banks, that it’s worthy of a UK banking license. A license would permit Revolut to increase past low-margin cash transmission companies, into lending merchandise like mortgages, bank cards, and enterprise loans. It could additionally be capable to provide clients regulator-insured deposits, just like the banks do.
And not using a UK banking license, says Ruth Wandhöfer, an creator and fintech marketing consultant—who helped negotiate the phrases of the EU payments legislation that opened the door to fintechs like Revolut—the corporate must utterly rethink its progress technique. There can be a “complete ecosystem of monetary merchandise” the agency wouldn’t be capable to provide, she says. “Mainly, you’re not collaborating in the true motion.”
Underneath a separate license issued by the Financial institution of Lithuania, Revolut is ready to function as a financial institution inside the EU and presently gives banking companies in 28 EU international locations. However the UK is by far its largest market—and a UK banking license, seen as a gold customary worldwide, would open doorways to new territories, like Australia and the US. It’s a vital piece of the puzzle, however one that may rely upon Revolut’s means to higher challenge the sense that its home is so as.