Fintech startup Revolut applies for European banking license

Financial technology (fintech) start-up Revolut is seeking to obtain a European banking license, and aims to build the first app-based bank that operates worldwide.

The London, U.K.-based firm is currently a financial services firm but is hoping to obtain a formal banking license in the region so it can offer more to its customers. Once licensed under European rules, it would be able to provide deposit and credit services, including overdrafts, personal loans and deposits held at a fixed term. Customers would also be able to deposit savings of up to 100,000 euros ($115,765), under EU protections.

Launched in 2015, Revolut’s app currently allows customers to open a current account in 60 seconds, and includes a pre-paid contactless MasterCard debit card, currency exchange and a peer-to-peer payments service.

Chief Executive and co-founder Nikolay Storonsky explained that the push to become a bank was part of his fintech firm’s ambition to go global.

“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,” he 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.”

The firm is one of many challenger banks that are taking aim at the customer base of more established lenders. As incoming European rules force banks to open up their customer data to third parties, fintech start-ups are hoping to take advantage.

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A number of challengers have been set up across Europe, including Britain’s Starling Bank and Germany’s N26. Both Starling and N26 have already secured banking licenses.

Asked how the firm differentiated from its fintech competitors, Storonsky said: “We’ll continue to innovate and offer great products to our users. We’ll also have a higher level of regulatory oversight which we believe will build trust in our brand. Sometimes the best way to disrupt an industry is from within, so keep watching this space.”

The business said it had been in talks with Lithuania’s central bank to prepare ahead of its EU license application.