For those of you who have not heard of Revolut, allow me to amend this situation. Revolut is a free, online banking app which allows you to make purchases, fee-free currency exchanges at mid-market rates and fee-free ATM withdrawls from anywhere in the world through the use of their contactless Visa card. It is also entirely free to sign up for an account and receive your own Visa card. “But won’t somebody think of the poor boffins in this ‘Revolut’s accountancy department. The whole endeavour seems fiscally ruinous! Surely those beleaguered are there tearing their hair out – or at least what little of that hasn’t been torn out already – over such financial recklessness? How on earth could they possibly ever make money from such a generous enterprise!?” Frankly, I have absolutely no idea, and, to be even franker, I don’t really consider that to be my problem.
Well, all of that may prove academic, as it appears that Revolut may be encountering some troubles. At the same time they revealed that their CFO, Peter O’Higgins, was resigning it was announced that a major internal investigation was underway to assess whether the company broke financial compliance regulations by allowing illegal transactions to be made through the app.
The Telegraph saw documents alleging that an automated system which screened money transfers through the app for possibly illegal activity had been switched off between July and September of 2018. The internal investigation was launched after this was brought to the attention of Revolut’s board of directors who launched an internal investigation concerning this.
However, Revolut’s founder and CEO, Nikolay Storonsky, has said that publications have failed to recount the full story. In a blog post entitled ‘Let Me Set The Record Straight’, he outlined that the decision of their CFO, Peter O’Higgins, to leave the company after two years, was entirely unrelated to this internal investigation, and that the two events had simply been conflated by media outlets to imply a more damning situation. He also outlined the particulars of what caused the internal investigation.
In summary, he stated that the company were rolling out new security software to screen for fraudulant and illegal payments. However, their new software resulted in too many false positives and as such, they decided to revert to their existing software for this until it was ready to be implemented.
“At no point during this time did we fail to meet our legal or regulatory requirements. We conducted a thorough review of all transactions that were processed during this time, which confirmed that there were no breaches. Unfortunately, this fact was not included in the original news story. This roll-out did not result in a breach of any sanctions or money laundering laws and requirements – so we did not send a formal notification to the regulator.”
Given the fact that – as may’ve been apparent from my proselytising of the app in the opening paragraph I am a keen fan of Revolut, this comes as thunderingly good news.