UK fintech unicorn Revolut granted European banking license

Key Points
  • U.K. fintech firm Revolut announced on Thursday it has been granted a European banking license.
  • The license will allow the London-based fintech company to offer services typically provided by traditional banks, including full current accounts, consumer and business lending and overdrafts.
  • Revolut CEO Nik Storonsky told CNBC he hopes to launch in the U.S. in March or April next year.
VIDEO3:3903:39
Revolut CEO: SoftBank tie-up may happen in the future

U.K. financial technology firm Revolut secured a big victory on Thursday in its quest to shake up European banking.

Revolut announced it was granted a banking license by the European Central Bank (ECB) that it will start to implement next year across key markets including the U.K., France, Germany and Poland.

The license will allow the fintech company to offer services typically provided by traditional banks, including full current accounts, consumer and business lending and overdrafts. Customers will also be able to deposit their salaries directly into Revolut accounts, with up to €100,000 covered under the European Deposit Insurance Scheme.

This is the first banking license Revolut has secured. It will take between three to six months to begin implementing the license, which was obtained through the Bank of Lithuania, across Europe, the company said.

Revolut founder and CEO Nik Storonsky told CNBC earlier this week the European banking license will be "one of many," adding it is a "good feeling" to receive the first one. Storonsky said the firm plans to apply for a U.K. banking license as well, in part because of uncertainty around Brexit.

"If we feel a 'hard Brexit' happens, we'll definitely need to have a license here," he said.

Revolut is among a growing list of digital banks that have secured banking licenses as fintech start-ups take on incumbents in the financial services sector. The U.K.'s Monzo and Starling have both secured banking licenses in the U.K., while Germany's N26 received its European license in 2016.

London-based Revolut has already been offering its more than 3 million customers a prepaid debit card and current account, as well as premium features like cryptocurrency trading and foreign exchange transactions. It says it is opening between 8,000 and 10,000 current accounts every day.

In April, Revolut closed a $250 million funding round that put its valuation at $1.7 billion. A recent report by The Times of London said Revolut is in talks with Japanese tech giant SoftBank to raise a fresh round of funding worth as much as $500 million. Storonsky told CNBC's Street Signs on Thursday Revolut doesn't "need the money" at the moment but didn't rule out a future partnership with SoftBank.

"It may happen in the future," Storonsky said.

Storonsky said his goal is to win over 100 million customers as the "best digital bank in the world," offering a one-stop-shop for users to manage their finances. The firm has plans to expand to the U.S. in 2019, as well as Canada, Singapore, Japan, Australia and New Zealand. Storonsky said he hopes the U.S. launch will happen in March or April.

"At the moment we have about 100,000 waiting in the U.S. without any marketing," he said.

The fintech sector is facing tough competition not only from start-ups but from big banks seeking to take at least some of their businesses digital. Goldman Sachs' digital bank "Marcus" launched in the U.K. earlier this year and has signed up 100,000 customers, its managing director told CNBC in November.

Many of Europe's fintech companies have shown big growth in user numbers but have struggled to make money. Storonsky said he's optimistic tech companies like Revolut can turn profits in the financial services sector.

"We can do what banks do, but we can do it 10 times cheaper," he said.

— CNBC's Ryan Browne contributed to this report

VIDEO3:3403:34
What is fintech?