Revolut, the fintech giant known for its innovative financial services, is experiencing another setback as its chief financial officer, Mikko Salovaara, departs the company for "personal reasons." This news comes at a critical time for Revolut, as its two-year-long pursuit of a UK banking license appears to have hit a roadblock, with reports suggesting that the process has nearly come to a halt.
Salovaara, who joined Revolut in 2021, had recently hinted that the prolonged licensing process was finally nearing completion, assuring stakeholders that it would be granted "any day now." However, after a six-month delay, Revolut submitted its accounts in March, only to have auditor BDO raise concerns about the validity of £477 million in revenue. BDO cited challenges in verifying the revenue due to the intricate configuration of Revolut's internal IT systems.
The departure of CFO Mikko Salovaara adds to the growing list of high-ranking employees who have left Revolut over the past year. Notable departures include UK Chief Risk Officer Victoria Stubbs, UK Head of Regulatory Compliance Justine Wootton, and UK Money Laundering Reporting Officer Mathew Seneviratne. These leadership changes, coupled with the ongoing banking license complications, have created a challenging situation for the company.
Meanwhile, another prominent figure in the fintech industry, Wise CEO Kristo Kaarmann, is planning to take a three-month sabbatical starting in September. Kaarmann's temporary absence will be filled by Chief Technology Officer Harsh Sinha, who will assume his responsibilities during this period. Kaarmann's decision to step away is motivated by his desire to care for his newborn son.
Revolut's struggles in recent months have attracted significant media attention, with concerns raised about the accuracy of the company's accounts and mounting delays in obtaining a banking license. The company initially aimed to file its accounts by September 2022 but missed the extended deadline, finally submitting them in early March. However, auditor BDO cautioned that it could not independently verify approximately 75% of Revolut's revenues due to complexities in the IT system. Revolut has maintained that the revenue's value is not in question.
The pursuit of a banking license has also been plagued by ongoing delays. Revolut, once considered the most valuable private company in Britain, submitted its application for a full license in 2021. Despite assurances from Salovaara in March that the license was imminent, the regulator has yet to grant it. Revolut's CEO, Nikolay Storonsky, voiced frustration over the sluggishness and delays in a recent interview, expressing concerns that this could hinder the company's growth and its prospects for listing in the UK.
In the past 18 months, Salovaara's departure marks another high-level executive leaving Revolut. The company has experienced an exodus of senior compliance and regulatory personnel, including its global head of compliance and regulatory affairs chief.
Revolut's current challenges highlight the obstacles faced by even the most prominent fintech players. The departure of CFO Mikko Salovaara, along with the persistent struggles in securing a banking license, raises questions about Revolut's future trajectory. As the company navigates these hurdles, industry watchers are keen to see how Revolut adapts and overcomes these setbacks to maintain its position as a leading innovator in the financial technology space.