The Financial Conduct Authority (FCA) conducted enquiries into fintech firm Revolut’s compliance practices after concerns were raised by a whistleblower.
Revolut is one of the fastest-growing start-ups in the UK, initially offering prepaid debit cards that allow travellers to switch between currencies with ease and at little cost. It has added services with incredible speed, offering customers the chance to buy and sell cryptocurrencies, buy travel insurances and third-party loans, among other services.
Although Revolut has yet to turn a profit, in November last year it claimed to have around three million users. While it does not hold a UK banking licence, in December, Revolut secured a specialised bank licence from European Central Bank, facilitated by the Bank of Lithuania.
The concerns over its compliance practices come after several senior risk, compliance and finance executives departed the company. In the last three years, two chief risk officers, two money-laundering reporting officers, a chief compliance officer and a chief financial officer have all left Revolut.
According to the BBC, the whistleblower, an ex-Revolut employee, told the FCA in 2016 about concerns they had over compliance and the conduct of the firm’s chief executive, Nikolay Storonsky.
In a statement, the FCA said: “It is true that Revolut would have been unaware of the source of intelligence that gave rise to our enquiries. However, it would be untrue to say that Revolut was unaware of our concerns and of the actions that we required them to take. It is for Revolut to comment on the specifics as it is not our policy to do so.”
In a blog posted on Revolut’s website, Storonsky wrote: “At no point during this time did we fail to meet our legal or regulatory requirements.”
“In July last year (2018), we rolled out a more advanced sanctions screening system in parallel with our existing controls. Like any other technology company, we’re always looking to improve our systems.
“In a nutshell, screening systems are designed to scan inbound and outbound transfers to make sure we do not execute payments to sanctioned individuals and entities.
“During the initial testing stage of these new systems, we decided that they were not calibrated to a standard that we would expect, so we therefore decided to temporarily revert to our existing controls. We conducted a thorough review of all transactions that were processed during this time, which confirmed that there were no breaches.”
Revolut has been approached for further comment.