Bank of England Orders Review of Revolut's Product Controls, Report Says

The Bank of England's Prudential Regulation Authority (PRA) has commissioned a formal review of Revolut's internal controls for new product approvals, according to a Financial Times report on Tuesday. The move places the fast-growing fintech under heightened regulatory scrutiny as it expands its offerings after securing a full UK banking license earlier this year.

Regulatory Scrutiny Intensifies

The central bank's regulatory arm issued a so-called Section 166 order around the time Revolut obtained its UK banking license in March, the report said, citing people familiar with the matter. This type of order, also known as a skilled-person review, compels a regulated firm to appoint independent experts, often from an accounting or legal firm, to assess its internal systems and controls.

The mechanism allows regulators to gather detailed evidence on a company's operations. If the review identifies shortcomings or rule breaches, it could lead to the PRA imposing penalties or pursuing other enforcement measures.

Expansion Drives Review

The review is intended to assess the risks associated with Revolut's rapid rollout of new financial products. The scrutiny comes as the company pushes further into traditional banking services, including:

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• A recent plan to offer unsecured personal loans ranging from £2,000 to £25,000.
• A new partnership with asset management firm Carne, enabling customers to invest in private technology companies.

Obtaining the full banking license was a critical step for Revolut, allowing its UK entity to accept deposits and enter lending markets dominated by established banks. The company has stated plans to expand its presence from 40 to 70 countries by 2030.

Context for Investors

Revolut has grown rapidly over the past decade, amassing over 80 million customers and achieving a reported valuation of $115 billion, according to the FT. The company's culture, which its chief executive has described as encouraging employees to operate like “self-guided missiles” in developing new products, has reportedly contributed to tensions with regulators.

The Section 166 review highlights the significant regulatory oversight that accompanies a full banking charter. For Revolut, it underscores the challenge of balancing rapid innovation and expansion with the stringent compliance and risk-management frameworks required of a major financial institution.