Nikolay Storonsky, a former champion swimmer in his native Russia, doesn't like being in the slow lane. There is a sign in the office that says "Get Shit Done".
The U.K. Chancellor of the Exchequer was buttonholed at a London event. It already offers money transfers, store purchases, share trading and pet insurance, and now it has applied for a British banking license. Any grownup bank would benefit from a license to add protected U.K. current accounts.
The Brits want to be sure that Revolut has the compliance and risk-management capabilities to avoid the stumbles of other finance. According to people present, a frustrated Storonsky asked Sunak what was taking so long, to which Sunak replied that approval hadn't arrived yet. A new vigilance around Russian businesses has not helped.
Its rise has been rapid. The card was launched in 2015 as a pre-paid card that offered cheap foreign-exchange fees, and was handed out at railway stations. It has more customers and a higher valuation. A funding round led by SoftBank Group Corp. made it Britain's most valuable startup.
The U.K. process means that Storonsky has to tread water in his attempt to make Revolut the everything store of internet banking. A person familiar with the situation says the Americans are unlikely to grant him a license until the British situation is resolved. The U.S. boss quit in December because of the delay.
There is a lot at stake. The U.K. and U.S. are key territories. It depends on cracking the mainstream banking market. The $33 billion figure is a long way from justifying its $325 million revenue in 2020.
The backdrop is not straightforward. People familiar with the situation say that the U.K. has concerns about whether banking apps are equipped to tackle money launderers and fraud.
The war on Ukraine brings attention to any Russian ties, no matter how loose.
He moved to London at the age of 20 and made his billions from setting up his business there. Both Yatsenko and Storonsky have British passports. The company is closing its Moscow office, according to a person familiar with the plan.
Putin's invasion makes politicians cautious. The director of a division of the Russian gas giant is the son of a Ukrainian. Jane Jee is a compliance lawyer for payment companies.
The committee concluded there were no Russians in the family after reviewing the family roots.
The venture capital firm set up by the richest Russian in Silicon Valley is called DST Global. He distanced himself from Moscow, saying there was no Russian money in any of the funds that invested in the company.
There are regulatory questions around Revolut that are more important. It's cheaper to run and it's more lightly supervised than a bank. It can lend directly and its deposits are not protected by state insurance.
The Financial Conduct Authority has an expensive and burdensome duty to show that it has the right compliance and fraud-fighting tools. Billions of dollars are spent by the big lenders on monitoring transactions. About 300 people work in the risk and compliance teams at Revolut.
Mark Hipperson, who co-founding Starling Bank, went through the process of getting a banking license in the U.K. The first person to apply was Storonsky.
Revolut is using its license to enter the EU. It launched as a bank in 10 other EU nations in January, after offering lending and credit products in the Baltic state and Poland in 2020.
Some of the challenges for banking apps as they mature are shown in its Lithuania experience. A compliance expert who worked at the office recently said that the priority is client friendly and that the onus is on asking for as few details as possible. The firm has been fined by the central bank.
The spokesman says that the company-wide compliance practice is the best in class.
In Britain, Revolut's product has been in focus. Though it is still available in the U.K., it hasn't been deemed fit and proper by the regulators because of concerns about its know-your-customer approach and transaction monitoring.
Some industry executives say that Sunak doesn't chime with the regulatory wariness of London. The perception that the Bank of England and the Financial Conduct Authority have weakened their support for innovation has been added to by the wait of the Revolut boss, who asked not to be named. The FCA welcomes innovation, but wouldn't comment on the holdup. London would love to host a stock market listing.
Official relations with Storonsky have not always been easy. His proposal to make a relative unknown chairman was objected to by the FCA. He settled on Martin Gilbert, the ex-boss of Aberdeen Asset Management, after angrily telling the regulators to pick who they wanted. Michael Sherwood, a former co-chief of Goldman Sachs International, is one of the finance veterans at Revolut.
There is a new maturity in the work culture of Storonsky, who has been criticized before for a toxic and target-obsessed work culture. As he navigates British officialdom, he will need that. Fans of Revolut's steel and gold bank cards will be cheering him on.
There is a great prize at stake. Hipperson says that the concept of the superapp is going back to the times when clients had a current account, loan, insurance all in one place. Customers were cold on this approach because banks took advantage of it.
Since its debut in 2015, the company has raised more than $1 billion. The company is expected to get more funding. There is a lot riding on the success of Storonsky.
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