Last week marked a hugely significant milestone for Revolut after it finally secured a UK banking licence after a three-year battle.
Whilst it may seem like business as usual for customers of Revolut in the meantime, the UK banking licence will enable the digital bank to offer lending options to its customers in the near future.
Not only will lending options help increase and build upon its nine million customers across the UK, but non-customers of Revolut may be swayed to jump on board and use the fintech’s array of digital banking services, potentially leaving the traditional banking scene.
There is something to be said now that Revolut joins the likes of Monzo, Starling Bank and other fintechs and neobanks in receiving a UK banking licence over the past several years.
Marca Wosoba, COO of blockchain-based payments firm ZBD, believes that the proliferation of fintechs gaining banking clearances only serves as competition not just amongst themselves, but to traditional UK banks as well.
She said: “This move allows the company to continue offering products such as lending to customers and to earn net interest income on deposits, big news now that we are no longer in a 0% interest rate environment.
“This serves as proof that an EMI can transform into a bank in the UK, similar to Adyen in the Netherlands, although this is a rare occurrence. This move presents significant competition for Starling, Monzo and established banks in the UK such as NatWest, Barclays and HSBC.”
The UK has been at the forefront of payment innovation in Europe for the past decade plus, overseeing many developments such as the launch of Open Banking in 2017 and being home to many of the most valuable fintechs across the world.
Despite this growth, the big four traditional high-street banks, such as Barclays, NatWest, HSBC and Lloyds Bank, still largely dominate a large proportion of the customer base.

There has also been long-running competition between the fintech and traditional finance sectors, with fintech often envious of traditional banking’s standing and the latter always seeking to obtain the technology infrastructure that the former constantly evolves.
Whilst there has been a tug-and-pull between the two sides, they have often worked alongside one another as long as they each benefit, in what has been coined as ‘coopetition’ in recent times.
However, with the backdrop of the UK economy still uneasy, the increase of banking licences to digital banks may represent regulators’ need for a new approach in how to take the country’s financial services to the next level to alleviate some economic concerns.
Alex Mifsud, CEO of Weavr, believes that Revolut’s UK banking licence indicates that innovators within the digital banking space now have the opportunity to enable change within the sector and cause ‘disruption’ to the UK landscape.
He said: “Regulators’ appetite for supporting innovation changes with the tide of public and political sentiments, and also the freshness of recent crises.
“Financial licences – whether for fintech or banking – have become increasingly harder to secure, especially for business models that promise innovation, or, dare we say it, disruption.
“One can argue whether Revolut’s long journey to a banking licence was deserved, but the fact is, it has now happened, and that can only be an encouraging signal to financial innovators in the UK, whose defining quality is that they are looking to change the present order in financial services.”
Whilst Revolut is set to go from strength to strength – now angling for a valuation increase of $40bn – its banking licence may breed new hope to other UK startups across the country.
Traditional banking will almost certainly remain dominant, but as the UK fintech continues to grow and innovate, it may not be long before those banking customers move over digitally.