(26 March 2026 – United Kingdom) Revolut’s belated UK banking licence approval is anticipated to result in a fully-fledged deposit war against incumbent high street majors including Lloyds and NatWest.
The United Kingdom’s (UK) big four majors including Lloyds, NatWest, HSBC and Barclays currently account for almost two thirds of £2.5 trillion in deposits (60 percent). Revolut’s official market entry is set to trigger a deposit war characterised by aggressive pricing on term deposits, onboarding and retention incentives, higher customer churn and heightened rate sensitivity.
Revolut can now accept cash deposits which it can lend on to customers as mortgages, personal loans or revolving business credit facilities. For every £10 billion of on-call current account outflows from the UK’s largest lenders, as much as £375 million in annual net interest income erosion is forecast by Bloomberg, leading to a four percent hit to profitability for Lloyds and NatWest.
“Revolut’s full UK banking license marks a strategic inflection point, enabling far more aggressive retail-deposit gathering and posing a direct threat to incumbent profitability, notably Lloyds and NatWest. Monzo is a great example of what a banking licence can do for a fintech’s funding model with the firm’s deposits surging to £16.6 billion by 2025, a major jump from £71 million in 2018” stated Bloomberg Intelligence Senior Industry Analyst, Tomasz Noetzel.
“The ultimate profitability hit for the big four depends on Revolut’s approach and whether it focuses on keeping its own costs low through lower interest rates or they make a play to snap up more customers with tempting high-paying savings accounts.”
“Companies like Revolut have raised the bar in terms of the retail proposition” commented NatWest CEO Paul Thwaite.