Revolut’s Mission for a Bank Charter in the U.S.
Revolut, a UK-based fintech company, is on a mission to obtain its own bank charter in the United States. Sid Jajodia, the company’s top executive in the U.S., highlighted the importance of direct access to regulators during the Money 20/20 conference in Las Vegas.
“While the partnership model works well, you miss out on things,” Jajodia explained. “You don’t have a seat at the table with the regulator. When there are issues, you want to be engaging directly with the regulator. That’s a key stakeholder in your ability to run the business.”
Benefits of Obtaining a Bank Charter
Jajodia pointed out three key perks that Revolut is eyeing in its pursuit of a bank charter. Firstly, consumer trust is closely linked to regulatory compliance. Secondly, having a bank charter would enable faster innovation without the additional layers of compliance associated with partner banks.
“If you truly want control of your destiny and you want all of that speed, you should be able to launch as quickly as you can,” Jajodia emphasized.
Thirdly, having deposits on the balance sheet is crucial for a lender’s stability and longevity. Jajodia highlighted the importance of building a strong balance sheet with deposits, especially during economic downturns.
Revolut’s U.S. Expansion Plans
Revolut recently announced a $500 million investment in the U.S. as part of its $13 billion global expansion strategy. This investment will involve capitalizing the bank ahead of its intended charter, as well as focusing on marketing, product development, and job creation.
Currently, Revolut has “a couple hundred people on the ground” in the U.S. as part of its global team of 11,000 employees.
It’s worth noting that Revolut isn’t the only international neobank looking to secure a U.S. charter. Nubank, a Brazil-based fintech company, also applied for a charter with the Office of the Comptroller of the Currency in September.
For more information, you can refer to the original source here.
