Revolut boss on Brexit: “I still haven’t seen any benefits so far”
Revolut co-founder and chief executive Nikolay Storonsky said the digital bank had yet to see any benefit in the UK’s decision to leave the European Union, speaking five years after the referendum.
“It was a pain for us. We spent a year and a half, two years preparing for Brexit, ”Storonsky said in an interview with The news of private equity ” sister title Financial news. “It was a problem for some of our customers.”
UK-based fintech companies were forced to change their operations following the vote, with some choosing to build European bases to allow them to continue serving customers on the continent once regulatory changes took effect.
Revolut, which is headquartered in London but obtained a Lithuanian banking license at the end of 2018, had to transfer some of its clients to the European entity by the end of 2020 – a process which Storonsky said required some of its users are ready to submit. additional administrative documents as part of the shift.
“I haven’t seen any kind of benefit for us until now,” Storonsky said of the Brexit outcome. “Maybe some banks have now pulled out of Europe and as a result we’ve added a little more European customers, but it’s very difficult to quantify.”
The fintech boss added that Revolut had to change “a lot of things” on its planned digital banking roadmap due to the regulatory change. “I wouldn’t say it was easy. There was a lot of work and it was pretty hard, ”he said.
About 4 million of Revolut’s 15.5 million customers are based in the UK, a spokesperson said, while the majority are in the European Economic Area.
After Brexit ended Revolut’s ability to license its Lithuanian license to London, the fintech company applied for additional UK and US banking clearances. It operates in both geographies using a partner bank to provide certain services, such as Barclays or Metropolitan Commercial Bank.
Other players had to make similar changes to their plans. Monzo has yet to launch an effort in Europe, while Starling Bank is seeking a license in Ireland to serve EU clients from its Dublin office in the future.
Revolut has revealed that it nearly doubled its losses in 2020 as rising administrative costs weighed on its balance sheet, posting a pre-tax loss of £ 207.9million for the 12 months ending at the end of December.
Over 88% of its turnover came from UK and European customers, while those outside the European Economic Area accounted for just 1.3%. Revolut also has deals in Japan, Australia, Singapore and the United States, with plans to open soon in India.