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 an excellent look.
Because it launched in 2015, Revolut has grown rapidly to six,000 workers 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 introduced its first ever yr of profitability.
But it surely has suffered a bunch of unflattering setbacks too; from an exodus of executives to late financials, expensive cyber incidents, and stories of excessive workers turnover and unhealthy work local weather revealed in WIRED. When Revolut ultimately 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 a protracted collection of own-goals—and the newest 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 Commonplace Chartered and Citibank. And hypothesis about dysfunction at Revolut, he says, may very well 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 broaden 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.
With out a UK banking license, says Ruth Wandhöfer, an creator and fintech advisor—who helped negotiate the phrases of the EU funds laws that opened the door to fintechs like Revolut—the corporate must utterly rethink its development technique. There can be a “complete ecosystem of economic merchandise” the agency wouldn’t be capable to provide, she says. “Mainly, you’re not taking part in the actual 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 at present supplies banking companies in 28 EU nations. However the UK is by far its largest market—and a UK banking license, seen as a gold commonplace worldwide, would open doorways to new territories, like Australia and the US. It’s an important piece of the puzzle, however one which may rely on Revolut’s capability to higher venture the sense that its home is so as.