Digital bank Revolut’s growth to more than 65 million users across 38 markets indicates how digital-first banks are transforming global finance. But the Fintech firm’s wait for a full UK banking license exposes a seemingly more pressing issue: how regulatory authorities adapt traditional frameworks to fast-scaling fintechs. The Prudential Regulation Authority’s (PRA) caution reflects a tension between ensuring financial stability and enabling digital banking advancements, says GlobalData, a data and analytics company.
The digital bank’s appeal is seemingly quite clear: frictionless global banking, competitive FX rates, crypto and stock trading, advanced budgeting tools, and instant payments, all delivered via an app-first interface. For tech-savvy consumers, Revolut isn’t just merely a convenient; it feels built for the way people live in the digital economy.
Despite its global presence, Revolut is still currently waiting for full UK banking certification. The PRA is said to be holding up approval due to concerns that the Fintech company’s risk controls could struggle to keep pace with its overseas expansion. This is an “unusually high bar, and for good reason.”
Joanne Kumire, Lead Analyst, Banking and Payments at GlobalData said that unlike traditional banks, which grew steadily over decades with local branches and sequential market entry, Revolut has scaled “5,000% in a few years, operating simultaneously across dozens of countries.”
This is “hard mode” for regulators. The PRA’s frameworks were “not built for a bank operating at this speed and scale.”
A full UK banking license should enable Revolut to take deposits and lend fully under UK regulation; provide expanded products with deposit protection under the FSCS; and compete on “a level playing field with legacy banks at home.”
But risk management in a digital-first, global bank looks “very ///from that in a branch-based bank.”
Traditional banking institutions depend on many years of operational history, local compliance teams, and more predictable transaction volumes.
Revolut depends on API-driven compliance, real-time monitoring, and high-velocity transactions across multiple jurisdictions. Both approaches aim for the same goal, “financial stability, but they manifest differently.”
This raises a more pressing question: how should regulators measure risk in a world of global-first digital banks? If oversight metrics are based solely on legacy frameworks, “delays are inevitable.”
But a more recalibrated approach, assessing systemic risk, tech resilience, and real-time controls, could potentially “accelerate approvals without compromising safety.”
Kumire concludes while delays risks market position, the PRA must also ensure that the UK “doesn’t become the site of a systemic failure.”
The analyst from GlobalData added that Revolut no longer just a startup testing the waters; it’s a global institution “asking the UK to catch up.”
The update concluded that how the PRA responds may potentially define “not only Revolut’s trajectory but the future of digital banking regulation itself.”