Revolut Secures a Second Banking Hub in Europe

Revolut, the global fintech company and digital bank headquartered in London, announced in August that it had secured a full French banking license following assessment by the ACPR and ECB. The news comes after Reuters reported the company’s push for banking licenses in France and the US back in April, making it a significant expansion milestone for one of Europe’s largest digital banking businesses.

A full French banking license affords Revolut new opportunities in that country by allowing it to operate similarly to traditional banks, such as by offering lending or savings products. While Revolut is best known in Europe for everyday banking and transactions, becoming a fully licensed bank offers the potential to deepen customer relationships, capture more customer lifetime value, and ultimately, change neobank economics.

The banking license gives Revolut its second banking hub in the European Union. The company’s first banking hub was established in Lithuania, following approval of a specialized bank license granted by the Bank of Lithuania in 2018. The company officially started operations as a licensed bank in the country in May 2020, before becoming a fully licensed bank there in December 2021. However, Revolut’s new Paris-based banking hub will operate alongside the Lithuanian one by initially serving French customers before expanding into Germany, Ireland, Italy, Portugal, and Spain. Lithuania, meanwhile, will remain central to the remainder of its EU operations.

Revolut says that it currently has approximately 30 million customers in Western Europe, making the region its largest and fastest-growing. Moreover, the company has committed €1 billion to the region and plans to expand its headcount by 600 in the coming years. It plans to open its new Western European headquarters in Paris in 2027. These numbers clearly affirm Revolut’s strategic efforts as part of a major regional operation, rather than regulatory housekeeping.

Despite the latest success story, locally supervised banking infrastructure remains as important as ever. The Financial Times reports that European regulators and watchdogs had previously restricted Revolut’s ability to launch some new products while they were scrutinizing its risk and compliance practices. While the EU’s passporting laws mean that a banking license issued in one member state enables Revolut to operate throughout the Single Market, local oversight can be beneficial in individual member states where the company wants to provide the complete range of financial services. In this case, the French and Lithuanian licenses act as a foundation, allowing them to diversify risk and offer localized high-value products in those countries.

Ultimately, this means Revolut can increasingly compete with incumbents across deposits, credit and lending, mortgages, cards, and payments. Meanwhile, traditional banks face increasing competition across a broader regulated product set, rather than a fintech that focuses on a relatively narrow slice of the banking relationship. For other fintechs, Revolut’s acquisition of a French banking license highlights the opportunity that comes with deeper product expansion, but that also demands substantial capital, governance, risk management, and strong relationships with industry supervisors.