Updated | Revolut CFO resigns amid digital banking company's money laundering controversy

Peter O’Higgins, Revolut’s chief financial officer, resigned in January, with details of his departure emerging after reports that the company’s board last year initiated an investigation into failings in its sanction screening system

The Revolut CFO's resignation comes after reports that the company had last year deactivated its anti-money laundering system
The Revolut CFO's resignation comes after reports that the company had last year deactivated its anti-money laundering system

Updated at 6.20pm with comments from Revolut CEO Nik Storonsky

Revolut’s chief financial officer reportedly resigned in January amid questions surrounding the company’s compliance systems.

Peter O’Higgins, who had been with the company since 2016, left the digital banking services firm earlier this year, Revolut confirmed on Thursday.

Information on his resignation emerged on Friday, a day after The Telegraph reported on an internal investigation which Revolut’s board started last year over a “failing” in its sanction screening system.

The newspaper had revealed that Revolut had deactivated an anti-money laundering system which flags suspicious transactions, due it having been prone to indicating false positives.

It reported that the system had been turned off between July to September 2018, and, as a consequence, illegal transactions were able to pass through the banking platform. Moreover, the newspaper said that Revolut failed to contact the Financial Conduct Authority in the United Kingdom to duly inform it of the issue.

In his resignation statement, O’Higgins, who previously worked for JP Morgan, made no reference to the incident.

“Having been at Revolut for almost three years, I am immensely proud to have taken the company from £1 million revenue to £50 million revenue during this time,” TechCrunch reported that he said in his statement, “However, as Revolut begins to scale globally and applies to become a bank in multiple jurisdictions, the time has come to pass the reigns over to someone who has global retail banking experience at this level.”

“My time at Revolut has been invaluable and I’m so proud of what myself and the team have achieved. There is no doubt in my mind that Revolut will go on to build one of the largest and most trusted financial institutions in the world.”

Revolut, which launched in 2015 and has its headquarters in the UK, has seen its services taken up by four million registered users across Europe.

READ ALSO35,000 Maltese signed up to digital banking platform Revolut

Malta has seen the company’s biggest market penetration level yet, with nearly 10% of the island’s entire population - over 35,000 Maltese - having signed up in a matter of weeks, country manager Dimitris Litsikakis had told MaltaToday last October.

When the company launched its services in Malta, CEO Nikolay Storonsky claimed Revolut would bring an end to the party for Maltese banks. 

Litsikakis, however, had explained this did not mean the end of banks, but insisted traditional institutions needed to wake up and face reality, them already being disadvantaged with not being able to keep up with technology advances as fast as new platforms like Revolut.

No money laundering breaches took place - Revolut CEO

In a blog post on Revolut’s website today, the company’s CEO Nik Storonsky said that he wanted to set the record straight about what had happened, emphasising that at no point was there any money-laundering breach concerning any transactions.

He said that, in July 2018, Revolut had rolled out a more advanced screening system to scan inbound and outbound transfers to ensure no payments are executed to sanctioned individuals and entities.

During the initial testing stage of the new systems, it was determined that they were resulting in too many false positives, so the company temporarily reverted to its existing controls.

“At no point during this time did we fail to meet our legal or regulatory requirements,” Storonsky highlighted, “We conducted a thorough review of all transactions that were processed during this time, which confirmed that there were no breaches.”

“Unfortunately, this fact was not included in the original news story. This roll-out did not result in a breach of any sanctions or money laundering laws and requirements - so we did not send a formal notification to the regulator.”

Storonsky also said that CFO O'Higgins' decision to resign was not "in any way, shape or form connected to this roll-out".

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