Revolut co-founder and chief executive Nikolay Storonsky said the digital bank has yet to see any benefits from the UK’s decision to leave the European Union, speaking five years on from the referendum.
“It was a hassle for us. We spent one and a half, two years preparing for Brexit,” Storonsky said in an interview with Financial News. “It was a hassle for some of our customers.”
Fintech firms based in the UK were forced to change their operations as a result of the vote, with some choosing to set up European bases to allow them to continue serving customers on the continent once regulatory changes came into effect.
Revolut, which is London-headquartered but gained a Lithuanian banking licence in late 2018, had to transition some of its customers over to the European entity by the end of 2020 — a process which Storonsky said required some of its users to be willing to submit additional administrative documents as part of the shift.
“I still haven’t seen any kind of benefits so far for us,” Storonsky said of the Brexit outcome. “Maybe some banks have now pulled out of Europe and as a result we added in a bit more European customers, but that’s very hard to quantify.”
The fintech boss added that Revolut had to change “quite a lot of things” on its planned roadmap for the digital bank because of the shift in regulation.
“I wouldn’t say it was easy. There was a lot of work and it was quite hard,” he said.
Around 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 brought an end to Revolut’s ability to passport its Lithuanian licence into London, the fintech firm took up pursuit of additional banking authorisations in the UK and the US. It operates in both geographies using a partner bank to provide certain services, such as Barclays or Metropolitan Commercial Bank.
Other players have had to make similar changes to their plans. Monzo has still yet to launch an effort in Europe, while Starling Bank is seeking a licence in Ireland to cater to EU customers from its Dublin office in future.
Revolut revealed it had almost doubled its losses in 2020 as rising administrative costs weighed on its balance sheet, posting a pre-tax loss of £207.9m for the 12 months to the end of December.
More than 88% of its revenue came from UK and European customers, while those outside of the European Economic Area accounted for just 1.3%. Revolut also has offerings in Japan, Australia, Singapore and the US, with plans to open up in India soon.
To contact the author of this story with feedback or news, email Emily Nicolle