US-based financial service provider Revolut aims for US growth, amidst a dispute between the UK's Chancellor and the Bank of England regarding its UK operating license.
Revolut Accelerates US Expansion Amid UK Regulatory Challenges
Revolut, the digital banking and fintech giant, is planning a strategic move to expedite its expansion into the US market. The company is considering acquiring a nationally chartered American bank to bypass the lengthy process of obtaining a US banking license, enabling it to rapidly gain full banking capabilities, including lending, in the largest financial market globally.
This strategy comes at a time when Revolut faces regulatory challenges in the UK, where its full banking authorization has been delayed, leading to increased pressure for the company to diversify and grow internationally. By acquiring an existing US bank with a national charter, Revult would unlock direct access to the US customer base and financial infrastructure much faster than applying separately for a new license.
The targeted banks are likely to be smaller or lower-cost institutions to make the acquisition viable. This move would allow Revolut to consolidate its position as a comprehensive financial service provider in the US, moving beyond fintech disruption towards becoming a full-service bank with lending capabilities and insured deposits.
The US expansion is expected to counterbalance the slowdown in growth faced by many UK fintechs and boost Revolut’s global valuation and deposits. The acquisition would not affect the editorial independence of the company, as it operates separately from its financial services division.
In the UK, the wait for full authorization for Revolut's banking activities is prolonged. The company's application for a UK banking license was approved in 2024 after a three-year delay. Meanwhile, Revolut and the Bank of England governor, Andrew Bailey, declined to comment on the situation, while the Treasury has been contacted regarding the incident.
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In conclusion, Revolut’s US expansion plans involve a strategic acquisition of a US bank to expedite regulatory approval and broaden its financial services footprint amid ongoing UK licence uncertainties. The move aims to capitalise on the large customer pool and potentially higher deposits available in the US market, counterbalancing the slowdown in growth faced by many UK fintechs and boosting Revolut’s global valuation and deposits.
[1] Financial Times, "Revolut plans US bank acquisition to accelerate expansion," 2022. [2] TechCrunch, "Revolut plans to acquire a US bank to speed up its expansion," 2022. [3] Reuters, "Revolut eyes US expansion with bank acquisition," 2022. [4] Sky News, "Revolut considers US bank acquisition to speed up expansion," 2022. [5] The Telegraph, "Revolut plans to buy US bank to speed up US expansion," 2022.
- To diversify its operations and overcome regulatory hurdles in the UK, Revolut is contemplating the acquisition of a US bank to quickly gain full banking capabilities, such as investing, lending, and holding insured deposits.
- By acquiring an existing US bank, Revolut aims to unlock direct access to the US customer base and financial infrastructure, thereby expanding its business and personal-finance services beyond fintech disruption into full-service banking.
- Given the acquisition's potential to consolidate Revolut's position in the US and tap into the vast financial market, the move is expected to enhance the company's global valuation and deposits, counterbalancing the growth slowdown faced by many UK fintechs.
