British fintech giant, Revolut, has again been given the green light to delay its account filing. According to information sourced from Companies House and Reuters, the initial deadline for filing the company’s 2022 accounts was 13th September. However, the firm has been granted an extension up to 31st December this year.
A spokesperson from Revolut has repeatedly confirmed the delay by stating, “We have received an extension for the filing of our 2022 accounts. We look forward to announcing our 2022 audit and annual report in due course.”
Previous Delays and Concerns
This isn’t the first instance where the company faced delays in its account filing. Revolut’s 2021 accounts, originally due in September 2022, were eventually published in March 2023 after a protracted delay of nearly nine months. This tardiness put a spotlight on concerns raised by the company’s auditor, BDO.
- BDO reportedly expressed an inability to verify £477m of revenue due to issues with Revolut’s IT configurations.
- Questions arose over the “completeness or occurrence” of these revenues, especially in the areas of foreign exchange, wealth, and crypto businesses.
- The Financial Reporting Council (FRC) criticized BDO in a 2022 report, pointing out inadequacies in the “approach to revenue recognition” for one “financial services provider” which may have led to unacceptably high risks of misstatements.
Implications for Banking License
The repeated delays and the concerns associated with them have wider implications, especially with respect to Revolut’s ambitions of securing a UK banking license.
- The process of obtaining this license has been prolonged for over two years, significantly longer than the typical turnaround time which usually falls under a year.
- Earlier this year, Revolut’s CEO, Nikolay Storonsky, commented that the delay in the banking license was in part due to apprehensions from ongoing banking crises involving entities like Silicon Valley Bank and Credit Suisse.
- The ongoing uncertainty and complications surrounding its financial reports might act as further roadblocks in the company’s bid to achieve this license. Without it, while Revolut can still operate in the UK, it will not be able to provide mortgages and loans – a key objective for the firm.
Revolut’s Internal Changes and Forward Movement
On the corporate front, the year witnessed some notable shifts. Mikko Salovaara, Revolut’s Chief Financial Officer, exited the company after two years, citing ‘personal reasons’. The departure of Salovaara, especially in light of these ongoing challenges, garnered attention. However, in an official statement, Salovaara expressed gratitude for his tenure at Revolut and remained optimistic about the company’s future trajectory.
Nevertheless, despite these challenges, the spokesperson from Revolut echoed a positive note: “We continue to be pleased with the growth of the business, new products, higher user numbers and volumes, and increased financial metrics that result.”
Future Prospects Amid Challenges
The delays and hitches in the audit process might be seen as a setback, but they also offer an opportunity for Revolut to further refine its internal systems and practices. The fintech landscape is ever-evolving, and companies must adapt swiftly to maintain their edge.
- Revolut’s decision to replace its internal accounting systems after facing criticism in the 2020 audit demonstrates a proactive approach. By addressing identified shortcomings, the company can better position itself for future audits and regulatory reviews.
- It is worth noting that, while the delay is significant, Revolut remains one of the most dynamic fintech platforms globally. Its continuous expansion into new product areas, coupled with its ever-growing user base, hints at a resilient growth trajectory.
Conclusion
As Revolut grapples with its internal audit challenges and navigates the process of obtaining a UK banking license, the fintech industry and its 30 million customers await the firm’s next moves with bated breath. With a robust user base and an expansive portfolio, the company’s next steps will significantly shape the fintech landscape in the coming monthsin the UK and potentially beyond.
