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Barclays’ chief executive has suggested that fintech rival Revolut has benefited from its lack of a full UK banking licence, with the fast-growing digital start-up not required to meet some “very important consumer obligations” imposed on traditional lenders.
CS Venkatakrishnan told the FT Global Banking Summit on Tuesday that fintechs had “really laid down the gauntlet to the banks in terms of the quality of services they provide”.
However, he suggested that banks were not operating on a level playing field with digital challengers such as Revolut.
“There is another side of it, which is that they don’t have a full banking licence in the UK, so they are free from some of the very important consumer obligations that we have to fulfil to society,” said Venkatakrishnan.
“I think we should continue to operate with our standards, with our integrity, with our regulation. If we can marry them, we will be happy,” he added.
Revolut secured a $75bn valuation in a fundraising round that concluded last week, briefly making it worth more than Barclays.
The banking start-up has become one of Europe’s most valuable fintechs, helped by a boom in demand for its crypto services. Revolut has 65mn customers globally, with 12mn in the UK.
Paul Thwaite, the NatWest chief executive, said in a separate interview at the summit that he was not concerned about being overtaken in valuation terms by Revolut, which he called a “very different business” compared with “a NatWest or a Barclays”.
“I don’t lose sleep thinking about market capitalisation. I lose sleep thinking about how we have got the best possible product and proposition to deliver to our clients,” he said.
Thwaite added: “Companies like Revolut have raised the bar in terms of the retail proposition so that is the lens I am looking at it through. What are they doing for their customers? What do we think we are doing better than what they are doing? What do I think we need to be better at?”
UK regulators are yet to award Revolut a full banking licence, capping the deposits it can take in and limiting its ability to lend, in part because of the rapid growth of its overseas operations.
Revolut said: “As a UK payment service provider, Revolut abides by the same regulatory and consumer protection standards as any traditional bank or other financial institution.”
Venkatakrishnan said that Barclays took on its consumer obligations “willingly and happily”.
He also commended UK chancellor Rachel Reeves after last week’s Budget for focusing on growth and building a greater fiscal buffer into the public finances.
“On balance, [the Budget] is a very good job. It is a good job that gives this government the room to take the next steps to promote growth and productivity, which is really what is needed,” he said.
Last week, Barclays announced it would be boosting investment in the UK by £45bn over the next three years.
“These are not small amounts and this reflects our confidence [in the UK],” said Venkatakrishnan.