Regulators should not roll over for Revolut

Since we launched our Economic Innovator (originally ‘Disruptor’) awards in 2018, I’ve had enjoyable contacts with well over 100 entrepreneur-led high-growth companies picked as finalists from across the UK. Most I met at convivial pitching lunches; the rest told me their stories by Zoom or phone. Only one chosen finalist has ever shunned both the lunch and the opportunity for a call: it was Revolut, the London fintech venture that’s currently hustling for a UK banking licence.

Revolut’s 38-year-old Russian-born founder Nikolay Storonsky has built a serious disruptor, valued in 2021 at $33 billion. Though Schroders – as a Revolut shareholder – has marked that figure down to $18 billion, it still bears comparison with Barclays and NatWest at £25 billion each. Storonsky was and is a busy man, but I also sensed a certain dismissive arrogance and I suspect the Prudential Regulation Authority (PRA) has a similar feeling. Why should a banking regulator hasten to licence a business whose auditors were unable to verify ‘the completeness and occurrence’ of three-quarters of its 2021 revenues; which has yet to present clean 2022 accounts; and which has parted company in the past year with, among others, its chief financial officer, UK chief executive and heads of risk and compliance?

Storonsky’s response is to call the PRA ‘extremely bureaucratic’ while threatening to apply for a licence in France or Spain instead – and to list Revolut on the Nasdaq exchange in New York rather than in London.