The UK’s nascent challenger bank sector continues to make huge strides with Revolut, a digital-only bank, confirming on Monday that it will be applying for a US banking license. Nikolay Storonsky, CEO of Revolut, made the announcement just a month after a successful round of fundraising for the firm he co-founded.
Storonsky, a former Credit Suisse trader, launched Revolut in 2015. He has claimed previously that his decision to do so was driven by frustrations over international transaction fees and bad exchange rates while abroad.
Since then the firm has managed to gain regulatory approval in the UK from the Financial Conduct Authority. It has also applied for a banking license in the European Union and has managed to attract nearly two million customers.
When it launched in 2015, Revolut initially offered a pre-paid debit card that could be used abroad without transaction fees and poor exchange rates. It now offers access to a cryptocurrency exchange, peer-to-peer payments, and current accounts.
This looks set to change too as Storonsky confirmed yesterday that the company will start selling other financial products. These will include a robo-advice service and non-commissioned stock trading.
The decision to expand into the USA appears to have been driven by a recent funding drive. In April, the firm was able to raise $250 million, taking it to a total value of $1.7 billion and making it one of the most valuable start-ups in the UK.
Revolut’s major investors, DST Global, Index Ventures and Ribbit Capital, are all based in California. This may have had some influence on the firm’s decision to apply for its US banking license in the West Coast state.
The UK start-up is not alone in its efforts to conquer the Land of the Free. Monzo, another UK challenger bank, and the German digital bank N26 are both in the process of applying to for US banking licenses.