Revolut nears Israeli banking license that could shake up the market

British fintech giant Revolut is in the final stages of obtaining a “narrow bank” license from the Bank of Israel, according to a report in TheMarker. If approved, the company would be able to offer deposits and loans in addition to its existing payments and foreign-exchange services, a move that could alter competition in Israel’s banking sector.

Revolut already operates in Israel mainly in payments and currency exchange, but the license would expand it from a fintech player into a broader digital bank. The Bank of Israel reportedly sees its entry as a chance to boost competition in a market long dominated by a small number of large institutions, potentially pressuring legacy banks to lower fees, improve customer service, offer better interest rates and upgrade digital tools.

The company has already prepared for a wider presence in Israel. It has rented offices in Tel Aviv, received an identification code from the Bank of Israel’s payment systems, recruited senior figures from the banking industry and appointed former Bank Leumi chairman Shmuel, known as Muli, Ben Tzvi as chairman of Revolut Israel.

In the first phase, Revolut is expected to focus on foreign exchange and payments, areas where it is known globally for relatively low fees. If the final approval comes through, it plans to expand into deposits and credit and compete with the major banks, digital banks and credit card companies. Revolut says it has more than 70 million customers worldwide and operates in over 40 countries.