Bank of England reviews Revolut’s product approval controls - report

The Bank of England has commissioned a review of Revolut’s product approval procedures to assess its internal controls as the fintech expands under its newly secured UK banking licence, including into personal lending, the Financial Times reported on Tuesday.

The central bank’s Prudential Regulation Authority (PRA) issued a so-called Section 166 order earlier this year to scrutinise the risks associated with Revolut’s rapid rollout of new financial products, the report said, citing people familiar with the matter.

The order was issued around the time Revolut obtained a full UK banking licence in March, with the review intended to assess the strength of the company’s internal systems, the report said.

A Section 166 order, also known as a skilled-person review, requires a regulated firm to appoint independent experts to assess its internal systems and controls. Such reviews are typically conducted by accounting or legal firms and produce reports recommending improvements, the report said.

The mechanism allows regulators to gather evidence and, if shortcomings or breaches of rules are identified, potentially impose penalties or pursue other enforcement measures, it added.

Revolut announced plans on Monday to offer unsecured personal loans ranging from £2,000 to £25,000, according to the report. It also revealed a partnership with asset management firm Carne that would enable customers to invest in private technology companies.

The fintech has amassed more than 80 million customers in just over a decade and carries a valuation of $115 billion, making it larger by that measure than three of the four biggest high-street banks in its home market, the report said.

Revolut’s banking licence followed years of waiting as the company worked to address regulators’ concerns about its rapid expansion.

The approval was considered key to its plans to increase its presence to 70 countries by 2030, from 40 currently, while enabling its UK banking arm to accept deposits and enter lending markets traditionally dominated by established banks, the report said.

The company has developed a diverse business spanning cryptocurrency trading, card payments and subscription services. Chief Executive Nik Storonsky has urged employees to operate like “self-guided missiles”, with limited oversight as they develop new products, the report said, adding that the approach has also contributed to tensions with regulators.