With the departure of compliance professionals, regulators are scrutinizing Revolut's processes
It has been disclosed that regulators are reviewing the procedures Revolut puts in place to avoid financial crime.
It follows an examination of company culture, which has been described as "hard charging," by regulators.
According to Saturday's report in the Financial Times, regulators sought a secondary investigation of the fintech's financial crime prevention and detection mechanisms following this culture examination.
Significantly, the fintech industry has been affected by the departures of senior compliance personnel.
The UK accounting authority, the Financial Reporting Council, identified a "unacceptably high" risk of "material misstatement" in Revolut's 2020 accounts, prompting its auditor BDO to urge the company to strengthen its internal controls.
Since early 2021, Revolut, which is licensed in Lithuania, has been seeking a UK banking license.
The Financial Conduct Authority and Prudential Regulation Authority, who are responsible for granting the license in the United Kingdom, refused to comment.
However, the Financial Times reported today that Revolut intends to sign off on its financial statements next week, following months of delays in finalizing the figures as auditors pushed the fintech company to enhance its internal controls.
The FRC's findings, which were reported by the FT in September, were that BDO's audit had a "inadequate" revenue recognition methodology. The FRC's criticism of BDO resulted in the auditor taking a more rigorous approach to this year's financial statements, according to sources familiar with the case.
The audit committee of the UK-based company will meet on Thursday to approve the financial statements for 2021, which are then anticipated to be signed off by auditor BDO on Friday, according to sources speaking to the Financial Times.
In its efforts to compete with conventional banks, the company managed by Nikolay Storonsky has endured severe growing pains.
The company, valued at $33 billion in July 2021, was regarded by insiders as having a hard-charging culture.
By fLEXI tEAM