The Financial Times reported that Revolut, a UK-based fintech, has been fined EUR 3.5 million by the Bank of Lithuania for deficiencies in its anti-money laundering (AML) procedures.
This penalty is described as the largest single fine imposed on the company so far. The regulatory action was prompted by issues found in Revolut’s monitoring of business relationships and customer transactions, which hindered the firm’s ability to effectively identify suspicious financial activities.
According to the Bank of Lithuania, these shortcomings resulted in the company failing to consistently recognize potentially illicit transactions. This led to a regulatory intervention. Previously, Revolut had faced a EUR 70,000 fine by the same authority for delays in submitting financial statements.
Revolut acknowledged working closely with the Lithuanian central bank to address the identified problems. The company reported implementing corrective measures and making internal changes to meet regulatory requirements. Despite emphasizing its commitment to compliance, Revolut recognized a need to bolster existing controls.
Growing Regulatory Scrutiny
Regulatory oversight of digital banks has intensified in recent years. In the UK, concerns have been raised about whether challenger banks can adequately adapt their compliance systems as they expand rapidly. The Financial Conduct Authority (FCA) warned in 2022 that increasing reports to the National Crime Agency signaled inadequacies in how some neobanks verify new customers.
A source cited by the Financial Times indicated that this EUR 3.5 million fine against Revolut represents less than 0.5% of its 2023 revenue and is significantly lower than the maximum allowed under Lithuania’s AML laws, which can be up to 10% of turnover. The findings did not point to confirmed money laundering incidents but rather focused on procedural improvements.
Revolut obtained a European banking license from Lithuanian authorities in 2021 and is permitted to operate across the EU. However, it has encountered delays in obtaining a full UK banking license; its application was stalled for over three years. In 2023, BDO identified weaknesses in Revolut’s IT system, suggesting potential issues with reported revenues from 2021.
In July 2024, Revolut received a restricted UK banking license and is expected to complete the necessary steps by the end of the year to start offering full banking services domestically.
