Following the recent criticisms of the executives of Microsoft and Revolut against the UK regulators, Russ Shaw, the Chief of Tech London Advocates, hit back at the tech giants saying the country’s regulators “roll over and play dead.”
“I think this is a good signal that our regulators are not just going to roll over and play dead, but they’re going to take their job seriously and scrutinize,” Shaw told CityAm. “If they don’t like something, whether it’s the financials or the way a big tech player is behaving, I think it’s important that they speak out.”
Two Tech Giants Criticize UK Regulators
The criticisms from the two tech companies came as the UK regulators scrapped their plans. Microsoft was hit with the Competition and Markets Authority’s decision to block the merger with Activision Blizzard, a video game company, raising concerns of hampering competition in the cloud gaming market. However, the antitrust bodies in the US and the European Union cleared the deal.
On the other hand, Revolut is not going to receive its long-awaited banking license in the UK, which it applied for in 2021. Though there is no official confirmation of the licensing decision, The Telegraph reported that the Prudential Regulation Authority (PRA) is due to reject the application over fears of the company’s accounts.
Indeed, Revolut is facing a severe backlash as its auditor, BDO, could not verify three-quarters of the revenue reported by the fintech in its delayed 2021 accounts. The company became profitable last year with a pretax profit of £59.1 million on revenue of £636.2 million.
Mikko Salovaara, Revolut’s Chief Financial Officer, who was confident about receiving a UK banking license, left the company recently. However, he cited personal reasons behind his exit. Meanwhile, Revolut is now considering applying for an Australian banking license.
Is the UK a bad place to do business if you're in tech?
— Simon Taylor (@sytaylor) May 20, 2023
Revolut will withdraw its banking license application. Revolut's CEO claimed the banking crisis spooked regulators. Earlier this month, the Revolut CFO quit citing "personal reasons."
This follows the UK denying…
The Founder of Revolut, Nikolay Storonsky, criticised the PRA and the Financial Conduct Authority and even compared the UK with the US tech regulatory space.
“US tech champions are so supported by the government: all the lobbyists, politicians, governors, they always promote business, business, business, and it is completely the opposite in the UK,” Storonsky said in an interview with The Times. “We have experienced a slowing down. You never know what needs to be done here.”
The Lobby Head Is Going with Regulators
However, according to Shaw, the UK regulators are showing their strengths following the country’s exit from the European Union. He added that the regulators have the intention of “getting companies to behave sensibly and responsibly, and [to] have some accountability.”
Meanwhile, the UK’s regulatory backlash towards fintech does not align with the country’s big plan to boost the sector. Earlier, the UK government came up with a plan to promote the country as a fintech hub.
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