WATCH: Malta’s Revolut Embrace Not Dampened Despite Money Laundering Breach Report
'You only need to look at the impact Revolut has had on the local market...'
Reports in the British press that Revolut had failed to block thousands of potentially suspicious transactions do not appear to have had an effect on the Maltese government’s embrace of the popular digital bank.
“I don’t think the Prime Minister was short-sighted [when praising Revolut],” parliamentary secretary for the digital economy Silvio Schembri told Lovin Malta. “The recent report has been contradicted, with one newspaper saying one thing and another one saying something else, and Revolut’s CEO also issuing a statement. I won’t get into the merits of who was right or wrong though.”
Schembri added that the government doesn’t endorse Revolut as a company per se, but rather the digital banking concept it has popularised
“You only need to look at the impact Revolut has had on the local market, but it is just one of many companies which offer similar services,” he said.
“The concept of digital banking is a phenomenal one and I think we need more of these companies around. In fact, the government’s policy direction is that we must tap into these sectors. In such a dynamic world where services are changing so rapidly, the industry must respond with new services.”
Revolut has proven immensely popular in Malta and thousands of people frequently use its app and blue card to carry out everyday transactions
It is also often seen as a blessing for expats, with whom Maltese banks are notoriously strict when they apply for accounts.
When it officially launched in Malta last year, its CEO Nikolay Storonsky accused Maltese banks of taking advantage of their customers for years with endless banking fees and “crappy technology”.
“Revolut is here to end the party for the bankers and provide the Maltese people with an innovative, technology-first banking alternative,” he said.
However, The Telegraph reported last weekend that Revolut had switched off an automated system designed to stop dubious transactions between July and September last year
This means that thousands of illegal and high-risk transactions could have passed through the digital bank.
The Telegraph reported that Revolut’s head of legal had sent a subsquent letter to the FCA, the United Kingdom’s financial services regulator, in which he admitted that this decision was an erroneous one and implied a remediable systems and controls failing. However, Revolut insists that at no point did it formally notify the FCA.
CEO Nikolay Storonsky later said that the company was enhancing its compliance regulation and was in the process of rolling out an advanced sanctions screening system. He said that a thorough review of the transactions that were processed during those three months ruled that no payments were made to sanctioned people and entities.