Fintech Insider Podcast by 11:FS
00:36:25 · Valentina Kristensen, Sarah Kocianski
[00:36:25] S3: I mean, I guess the other thing that kind of jumped at me from the story was that they said that they've recently launched their series d funding round aimed at large investors. So my question is, what were they doing with series a, b, and c? I mean, if they haven't... If they've... All they've done so far is raise deposits, they haven't started doing any lending. What on earth do they need to do, you know, four rounds for? [00:36:44] S1: So as far as I understand it, and this is, kind of based on conversations I've had with people and sort of, you know, things that I've seen, actually, it's getting licensed. And the licensing process in Australia, whilst they came out and were very optimistic that they had learned a lot from The UK and were gonna be able to do things similarly, the bit between getting your restricted license and your full license has taken a hell of a lot longer and been a hell of a lot more resource intensive than any of those banks thought it would be. There are suggestions that that's deliberate by the regulator, they do not want too many new banks in the market too quickly. You have to remember how many people or rather how few people there are in Australia, they've got around 20,000,000. So I actually think that's where a huge amount of money has gone is it's been sucked up and just getting to the point where they're actually allowed to even take those deposits. Now they've gotten there. They're gonna take everything they can.
00:37:36 · Ross Gallagher
[00:37:36] S0: But... And I think that's it. Right? It's like they they have done that. They've done that very well, but actually, it's like where they go from here, I think that's really gonna that's really gonna define success. Absolutely. Sorry. I'm gonna move us on to our next story, which comes from AltFi and concerns Revolut allegedly applying for a UK banking license. So the challenger wants to get the license before the end of the year, obviously. It currently operates in The UK and the European banking license. In addition to solving passporting problems, the license would allow Revolut to hold its own deposit and bring its lending in house. This will be the company's first formal UK banking application. And last month, Revolut announced that it would move its European payment operations to Lithuania and to Ireland when the when The UK leaves the EU. So I guess if I were to put a question out there, it would be how much of this is about working around sort of future issues with passporting and then how much of it is about being able to sort of expand out that existing suite of of banking products and services?
00:38:36 · Sarah Kocianski
[00:38:36] S1: So what people listening to the podcast can't tell is that I pulled a a big face at Ross there. It doesn't operate in The UK on a European banking license, operates in The UK on an e money license. It has a it has a banking license from Lithuania, but it does not operate on that. And in fact, it doesn't have any full stack banking services live. So, you know, that that is a quite an important difference, particularly when you look at what's happened in '26. The other thing I think is interesting just in here is that the first formal UK banking application Sure. There have been rumors abounding for a very long time. River... Been trying to do this forever. Mean,
00:39:11 · Valentina Kristensen, Ross Gallagher
[00:39:11] S3: so I was just... I mean, having a a Google. So in January last year, Nikolay, Stransky, the CEO, said... Or I should say cofounder because there's lots of CEOs there now. But, you know, he unveiled his plan to build a global licensing team that will be responsible for securing banking, trading, and credit licenses, starting with The UK and The US, and that was in January 2019. So we're now fifteen months later. He explained, you know, Brexit is obviously a little bit of an inconvenience for us, but we've never been a reactive company. That's why we've now secured an e m... EMI, electric money institution license in both The UK and Europe. And now that we have a European banking license in place, our next step is to secure a UK banking license. So I'm not really sure, like, why this is news. I mean, I can find it on a formal application. They put out a press release on it. Maybe people just wanted something different to write about besides coronavirus. [00:39:58] S0: Yeah. Well So
00:39:58 · Ross Gallagher, Sarah Kocianski
[00:39:58] S0: Yeah. Well So [00:39:59] S1: I was just gonna say, why not work on getting stuff up and running off the back of that Lithuanian license that they've got? I know and I know it has been mired in issues that... Too much. Actually, I believe that the the country's government has gotten involved about the handing out of that license and whether it was it is Lithuania, isn't it? Yeah. I had a mental block there. Why haven't they started taking deposits in the EU? Why haven't they got those banking products live there before they look at The UK market? Because as far as I understand it, Revolut's customers are actually pretty evenly spread. It's not like, for example, I don't know, Monzo was starting when most of their customers are in The UK for obvious reasons. But like I... As far as I understand it, like, Revolut is is pretty broad spread. So why aren't they doing that first?
00:40:44 · Valentina Kristensen, Ross Gallagher, Sarah Kocianski
[00:40:44] S3: No. I think also this is the challenge. Right? I mean, it's not just... Like, the license is one thing. I mean, it's a it's a big thing. But then once you get the license, you know... Well, sorry. Before you even get the license, you have to get the XCO, you know, the the the CEO, the audit. If you go on to their their careers page, I mean, they're currently recruiting for, like, three or four different c... Three CEOs, one in in The UK, one in Japan, one in Canada, two chief compliance officers, two chief risk officers, one chief product officer Yeah. 423 positions. They said they're gonna hire another 3,500 people, you know, so effectively trying to become a a global bank. And, again, I mean, that's replicating a model that that, you know, that has existed for a long time. [00:41:25] S0: And, again, to me, you know, it it was flying in the face of of sort of what they've said actually looks or at least comes across as actually being quite reactive because I think they're trying to add more seasoned traditional bankers to their board and positions of influence, you know, to to sort of, I guess, preempt and... Yeah. Exactly. [00:41:43] S1: I would just... On that note, and it's not really relevant to applying for a license. Although it might be actually. I'd like to see a bit more diversity in their highs. Any more, you know, men who've served at banks, you know, that's not really... If what they are doing is trying to bolster, you know, that that senior suite so that they look a bit more, I don't know, seasoned or respectable Only