British government alarmed at Revolut’s attack on red tape – media

The digital bank lashed out at the “extremely bureaucratic regulator” last week

The British business secretary is seeking an emergency meeting with digital bank and technology company, Revolut, over fears the company may leave the UK, The Telegraph reported on Sunday, citing sources.

It comes after the CEO of the London-based neobank lashed out at the British government last week over the “extreme bureaucracy” preventing the firm from competing on an international level. According to The Telegraph, officials in France and Spain have courted Revolut to move its operations from the UK.

According to the newspaper’s sources at the Department for Business and Trade, Business Secretary Kemi Badenoch wants to meet Nikolay Storonsky, the chief executive of the $33 billion technology company, to convince him to stay.

Revolut’s co-founders launched an attack on the British government last week in two separate interviews, during which Storonsky criticized red tape and high taxes in the UK.

“Regulators are doing a lot to slow us down. We are not allowed to grow and compete internationally,” he said.

In an interview with the Times of London, Storonsky and chief technology officer Vlad Yatsenko pointed out that the firm had applied for a UK banking license in 2021 and is still waiting for a decision from the Bank of England’s Prudential Regulation Authority.

“You wait for emails or letters for months,” Storonsky said. “This is not the business environment to operate in the modern world.”

The British government has repeatedly said it wanted to promote the country as a science and technology superpower, and Revolut was singled out by Chancellor Jeremy Hunt in January as a “shining example from our world-beating fintech sector.” However, according to Revolut’s co-founders, despite the talk, there was “very little action” to help the sector.

In a separate interview to the Financial Times, Storonsky said regulators in the UK were being “extra cautious” due to the current banking crisis.

Read more

He also warned that, in the event of a public offering, the firm wouldn’t consider listing on the London Stock Exchange but would choose the US instead.

“It’s hard to do business in the UK: the exchange is much less liquid so I just don’t see the point,” Storonsky said. “In the UK, there are higher taxes to pay and an extremely bureaucratic regulator,” he added.

According to the Revolut CEO, London has lost some of its appeal for talented people since Brexit.

“In the past, a lot of people would come to London; it was the place to be,” he said. “That has now changed.”

Revolut’s finances have been under scrutiny recently after the firm was late filing its annual accounts following concerns raised by its auditor, who said it was unable to verify £477 million ($602 million) of Revolut’s £636 million ($802 million) in sales in 2021.

According to Storonsky, that issue has since been resolved.

Revolut was founded in 2015 as a cross-border money transfer platform but has since expanded into other areas including cryptocurrency trading and consumer loans. It says it has more than 28 million customers globally, including some six million in the UK, and employs more than 6,000 people.

Find more stories on economy and finance in TROIB business