AT A GLANCE

In April 2025, Lithuania’s central bank fined Revolut Bank a record-breaking €3.5 million—Lithuania's largest-ever AML penalty—for failing to adequately monitor customer relationships and transactions. The fine reveals critical lessons for all fintechs: compliance infrastructure must scale with growth, transaction monitoring must be real-time and adaptive, procedural gaps are as dangerous as technology gaps, and proactive compliance is far cheaper than fines and reputational damage.

What Happened with Revolut's AML Fine?

In April 2025, Lithuania's central bank issued Revolut Bank a €3.5 million fine—the highest AML-related penalty ever imposed in Lithuania. The Bank of Lithuania determined that Revolut failed to adequately monitor customer relationships and transactions, resulting in the company "not always properly identifying suspicious monetary operations or transactions.

The fine specifically targeted systematic weaknesses in Revolut's AML monitoring processes rather than isolated incidents. Regulators found that Revolut's systems and procedures were insufficient to detect patterns that could indicate money laundering, terrorist financing, or other financial crimes, even though no confirmed money laundering cases were ultimately identified.

Despite Revolut's cooperation during the investigation and implementation of remediation measures, the severity of the compliance breaches and Revolut's substantial revenue led regulators to impose the maximum penalty. This unprecedented fine amount signals a fundamental shift in how European regulators approach fintech compliance enforcement.

Key point: The fine wasn't about proven money laundering—it was about having inadequate systems to detect it. For regulators, the inability to identify suspicious activity is as serious as the criminal activity itself.

Why Was Revolut Fined for Money Laundering Compliance?

Revolut's fine stemmed from multiple interconnected compliance failures that created systemic vulnerabilities in its AML framework.

Inadequate Transaction Monitoring - Revolut's transaction monitoring systems failed to effectively track and analyze customer activity in real time. The systems didn't adequately identify patterns consistent with money laundering typologies, such as structuring, rapid movement of funds, or transactions lacking clear economic purpose.

Insufficient Customer Relationship Oversight - Beyond individual transactions, Revolut failed to maintain adequate ongoing monitoring of customer relationships. This includes understanding changes in customer behavior over time, identifying deviations from expected transaction patterns, and conducting periodic reviews of customer risk profiles.

Procedural Deficiencies - The Bank of Lithuania identified gaps in Revolut's policies, procedures, and internal controls. These procedural weaknesses meant that even when suspicious activity was detected, it might not be properly investigated, escalated, or reported according to regulatory requirements.

Rapid Growth Outpacing Compliance - Revolut's explosive growth trajectory was an underlying factor. The company scaled its customer base and transaction volumes rapidly while operating across multiple jurisdictions, but its compliance infrastructure didn't keep pace with this expansion.

This growth-compliance imbalance created conditions where monitoring systems became overwhelmed, procedures weren't standardized across markets, and compliance teams lacked the tools and resources to effectively manage risk.

What Are Revolut's Compliance Issues Beyond This Fine?

Revolut's €3.5 million AML fine isn't an isolated incident but part of a broader pattern of regulatory scrutiny.

The UK's Financial Conduct Authority has previously flagged concerns about Revolut's risk controls and compliance capabilities, delaying the company's application for a full UK banking license. These recurring regulatory issues suggest systemic challenges rather than one-time failures.

Revolut's pursuit of banking licenses has been slowed by regulatory concerns about global risk controls, anti-money laundering systems, and governance frameworks. These delays limit Revolut's ability to offer certain products and reduce operational flexibility.

In response to regulatory pressure, Revolut has made substantial investments in compliance infrastructure, including hiring personnel, implementing new monitoring technologies, and enhancing procedures. However, these reactive measures often cost more and take longer than proactive compliance building.

What Is Fintech AML Risk?

Fintech AML risk refers to the unique money laundering and terrorist financing vulnerabilities that financial technology companies face due to their business models and operational characteristics.

Speed and Scale Create Vulnerability

Fintechs typically process transactions faster and at greater volume than traditional banks, with customers able to open accounts and move money within minutes. This speed creates AML challenges because rapid onboarding and transaction processing leave less time for thorough due diligence and monitoring.

Criminals exploit this speed, using fintech platforms to quickly move illicit funds before detection systems can identify suspicious patterns.

Digital-Only Relationships

Most fintechs operate entirely online without face-to-face customer interactions. While this creates operational efficiency, it increases identity fraud risk and makes it harder to detect suspicious behavior that might be apparent in person.

Digital-only relationships require enhanced electronic verification methods and more sophisticated behavioral analytics to compensate for the lack of physical customer interaction.

Cross-Border Complexity

Fintechs often operate across multiple jurisdictions from day one, serving customers in dozens of countries. This geographic reach creates compliance complexity because AML regulations, reporting requirements, and risk profiles vary significantly by country.

Monitoring transactions across borders requires understanding different regulatory frameworks, sanctions regimes, and money laundering typologies in each market.

Innovative Product Offerings

Fintechs introduce innovative products like cryptocurrency trading, peer-to-peer payments, and instant cross-border transfers. While these products meet legitimate customer needs, they also create new money laundering methods that traditional AML systems weren't designed to detect.

Each new product requires updated risk assessments, tailored monitoring rules, and specialized training for compliance teams.

Is Revolut a Shadow Bank?

Revolut is not a shadow bank in the traditional sense, though it operates in regulatory gray areas that share some characteristics with shadow banking.

Unlike shadow banks that operate outside banking regulation, Revolut holds a banking license from the Bank of Lithuania (issued in 2018), allowing it to accept deposits and provide banking services in the EU. This makes Revolut a licensed bank subject to banking supervision and regulation.

However, Revolut operates differently from traditional banks, with lighter capital requirements, different business models, and varied regulatory oversight depending on jurisdiction. In some markets, Revolut operates under full banking licenses with comprehensive regulatory oversight. In others, it operates under electronic money licenses or payment service provider licenses with lighter requirements.

This varied regulatory status means Revolut's oversight differs significantly by jurisdiction—it's heavily regulated in Lithuania but less so in markets where it operates under lighter license categories.

Revolut does share some characteristics with shadow banking entities: rapid growth, innovative products that challenge traditional regulatory frameworks, digital-only operations, and reliance on technology over traditional banking infrastructure. These characteristics create regulatory challenges similar to those presented by shadow banks.

The shadow bank question matters because it affects regulatory expectations, capital requirements, consumer protections, and systemic risk oversight. Licensed banks face stricter requirements than shadow banks, meaning Revolut's AML compliance obligations are more stringent than they would be as an unregulated entity.

What Is Revolut's Cryptocurrency Regulatory Compliance?

Revolut offers cryptocurrency trading and investment services, adding regulatory complexity to its compliance obligations.

Cryptocurrency presents heightened money laundering risks due to transaction pseudonymity, cross-border transfer ease, and limited oversight. Criminals use crypto to obscure fund origins, transfer value internationally without banking oversight, and convert illicit funds. For Revolut, offering crypto means implementing additional AML controls for virtual asset risks.

EU regulations require cryptocurrency providers to implement the same AML controls as traditional services: customer due diligence, transaction monitoring, suspicious activity reporting, and sanctions screening. The Markets in Crypto-Assets (MiCA) regulation, implemented in 2024, created comprehensive EU-wide crypto rules.

The FATF's "Travel Rule" requires crypto providers to collect and share information about transaction senders and recipients, similar to wire transfer requirements. This requires technology infrastructure to exchange information with other platforms.

Effective crypto AML compliance requires blockchain analytics tools that trace fund flows, identify illicit activity connections, and assess risk scores for crypto addresses. Revolut must integrate these capabilities with traditional transaction monitoring for comprehensive oversight across fiat and crypto.

Why Is Revolut Bad for AML Compliance? (Understanding the Criticism)

Critics have raised several concerns about Revolut's AML compliance approach, though the company has made improvements following regulatory feedback.

Revolut's rapid expansion strategy prioritized customer acquisition and product launches over compliance infrastructure. This growth-first approach created conditions where compliance lagged behind business scale, leading to the vulnerabilities that caused regulatory penalties and license delays.

Revolut heavily relies on automated systems for compliance decisions, sometimes at the expense of human oversight. While automation enables scale, it can miss nuanced risks that experienced professionals would identify. Effective AML requires balancing technology with human expertise.

Revolut has often addressed compliance reactively after regulatory feedback rather than proactively building frameworks beforehand. This reactive approach led to regulatory friction, business delays, and the €3.5 million fine.

Operating across 35+ countries with different requirements creates inherent challenges. Revolut has struggled at times to maintain consistent standards across markets while adapting to local requirements, highlighting the operational challenges global fintechs face.

Key Lessons: What Every Fintech Should Learn from Revolut's Fine

Lesson 1: Growth Must Not Outpace Compliance Infrastructure

Fintechs often prioritize product development and customer acquisition, unintentionally sidelining compliance. But regulators watch closely, and compliance frameworks must evolve with scale.

Rapid growth without corresponding compliance investment creates systemic vulnerabilities that eventually trigger regulatory action. Building compliance capabilities ahead of growth—rather than catching up after the fact—prevents the problems Revolut encountered.

Flagright's modular compliance infrastructure ensures institutions can scale safely without sacrificing AML integrity, with systems designed to handle growth before it happens.

Lesson 2: Transaction Monitoring Must Be Real-Time and Adaptive

Revolut's failure stemmed partly from insufficient ongoing business relationship monitoring. Static rule-based systems are no longer adequate for detecting sophisticated money laundering schemes.

Modern AML compliance requires real-time monitoring that analyzes every transaction as it occurs, adaptive models that learn from new patterns, behavioral analytics that identify deviations from customer norms, and machine learning that detects emerging typologies that rules-based systems miss.

Flagright’s AI-native transaction monitoring system provides real-time alerts, dynamic risk scoring, and pattern recognition capabilities to identify anomalies before they escalate into regulatory issues.

Lesson 3: Procedural Gaps Are as Critical as Technology Gaps

Revolut faced scrutiny over process-level weaknesses, not just technology failures. Fintechs must ensure that standard operating procedures, case management workflows, alert escalation protocols, and suspicious activity reporting processes are clear, documented, consistently applied, and frequently reviewed.

Technology alone doesn't create compliance—people and processes using technology effectively create compliance.

Flagright developed an integrated AML case management  and audit trail system that helps compliance teams stay ready for regulatory inspection, with every decision and action fully documented.

Lesson 4: Regulatory Expectations Are Rising Across Europe

With Lithuania setting a €3.5 million precedent, other EU regulators may follow suit with increased enforcement. Fintechs operating under EU passports or multiple licenses must maintain harmonized compliance standards across all jurisdictions.

The era of light-touch fintech regulation is ending. Regulators now expect fintechs to meet the same compliance standards as traditional banks, with penalties reflecting this expectation.

Flagright helps institutions align with FATF guidelines, EU Anti-Money Laundering Directives, and local regulatory frameworks through pre-configured compliance logic and localization features that adapt to each jurisdiction's requirements.

Lesson 5: Proactive Compliance Is Cheaper Than Fines and Reputational Damage

While Revolut reported no confirmed laundering cases, the reputational impact of the fine is substantial. Negative publicity affects customer trust, delays banking license applications, complicates fundraising, increases due diligence from partners, and attracts additional regulatory scrutiny.

A proactive compliance strategy driven by automation, analytics, and AI not only prevents penalties but also boosts institutional trust, enabling business growth rather than constraining it.

It's no surprise that not a single Flagright customer across six continents has ever received a compliance fine—proactive infrastructure prevents problems before they occur.

How Can Fintechs Avoid Revolut's AML Compliance Mistakes?

Implement Comprehensive Transaction Monitoring - Deploy systems analyzing every transaction in real-time against customer risk profiles, regulatory requirements, and money laundering typologies. Effective monitoring combines rule-based detection for known patterns with machine learning for emerging threats.

Build Scalable Compliance Architecture - Design systems with scale in mind from day one. Infrastructure that works for 10,000 customers often breaks down at 1 million if not built for growth. Scalable architecture maintains performance as volumes increase, keeps processes consistent across markets, and ensures compliance teams have needed tools.

Maintain Strong Governance - Establish clear governance with defined roles, responsibilities, and accountability. Board-level compliance oversight, independent compliance functions with executive access, and regular reporting are essential. Governance keeps compliance a strategic priority.

Invest in Compliance Expertise - Hire experienced AML professionals understanding regulatory expectations, money laundering typologies, and fintech risks. Adequate staffing, ongoing training, quality tools, and clear escalation pathways are critical.

Conduct Regular Risk Assessments - Continuously assess AML risks across products, customer segments, markets, and processes. Risk assessments should drive control design, resource allocation, monitoring rules, and due diligence requirements, updated regularly as business evolves.

What Compliance Technology Do Fintechs Need?

Real-Time Transaction Monitoring - Systems that analyze transactions as they occur, applying hundreds of detection scenarios simultaneously. Real-time monitoring enables immediate intervention for high-risk transactions rather than discovering problems days or weeks later. Flagright provides real-time transaction monitoring that processes millions of transactions daily while maintaining subsecond performance.

AI-Powered Risk Detection - Machine learning models that identify suspicious patterns not captured by static rules. AI adapts to new money laundering methods automatically, improving detection accuracy while reducing false positives. Flagright's AI-native platform learns from investigation outcomes, continuously improving detection while reducing alert volumes.

No-Code Rule Customization - Flexibility to create, modify, and tune detection rules without engineering resources. Compliance teams should be able to respond to new threats or regulatory requirements immediately. Flagright's no-code interface empowers compliance teams to adjust monitoring logic in minutes, not months.

Cross-Jurisdictional Compliance Support - Systems that handle varying regulatory requirements across markets, automatically applying appropriate rules, thresholds, and reporting formats for each jurisdiction. Flagright supports compliance across 100+ countries with pre-configured rules for major jurisdictions.

Centralized Case Management - Unified platforms where alerts are generated, investigated, documented, and resolved in one system. Flagright's case management system organizes the entire investigation lifecycle from alert to SAR filing, with every decision fully documented.

Automated Investigations - Technology that enriches alerts with relevant customer data, transaction histories, and external intelligence automatically. Flagright automatically gathers investigation data, presents it clearly, and guides investigators through consistent workflows.

Practical Tips for Building Proactive AML Compliance

Start with Strong Foundations - Build comprehensive compliance infrastructure before scaling, not after problems emerge. Retrofitting compliance into fast-growing operations costs more and works less effectively than building it correctly initially.

Prioritize Real-Time Capabilities - Invest in transaction monitoring that detects suspicious activity as it occurs rather than through batch processing. Real-time detection enables prevention instead of just investigation.

Balance Automation with Expertise - Use technology to handle scale and consistency, but maintain human oversight for complex decisions and nuanced risk assessment.

Document Everything - Comprehensive documentation protects against regulatory criticism and demonstrates good-faith compliance efforts even when controls prove imperfect.

Test Controls Regularly - Don't wait for regulators to find control weaknesses—internal audit and testing should identify gaps first.

Stay Ahead of Regulatory Changes - Monitor regulatory developments proactively and implement changes before they become requirements.

Build Compliance into Product Development - Assess AML implications during product design, not after launch. Compliance should be a product requirement, not an afterthought.

Invest Proportionally - Compliance spending should scale with transaction volumes and risk levels. Underinvestment creates the vulnerabilities that lead to fines.

Foster Compliance Culture - Make everyone in the organization responsible for compliance, not just the compliance department.

Learn from Others' Mistakes - Study enforcement actions against other institutions and implement controls addressing those weaknesses before facing similar scrutiny.

Frequently Asked Questions

What was Revolut fined for in 2025?

Revolut received a €3.5 million fine from Lithuania's central bank in April 2025 for inadequate AML monitoring and failing to properly identify suspicious monetary operations and transactions. The fine targeted systematic compliance weaknesses rather than specific confirmed money laundering cases.

Why is Revolut considered risky for AML compliance?

Revolut's rapid growth, digital-only operations, cross-border complexity, and innovative products create inherent AML risks. The company has faced regulatory criticism for allowing business expansion to outpace compliance infrastructure development, though it has made substantial compliance investments following regulatory feedback.

Is Revolut safe to use despite the AML fine?

Revolut remains safe for customers despite the AML fine. Customer deposits are protected by EU deposit guarantee schemes up to €100,000. The fine addressed internal compliance processes rather than customer fund security or data protection. However, the compliance issues do raise questions about regulatory risk and business sustainability.

What are fintech AML risks compared to traditional banks?

Fintech AML risks include faster transaction speeds leaving less time for scrutiny, digital-only relationships making identity verification harder, rapid customer onboarding potentially admitting high-risk customers, innovative products creating new money laundering methods, and cross-border operations complicating compliance. Traditional banks face these risks too, but at slower pace and smaller scale.

How much did Revolut pay in AML fines?

Revolut paid €3.5 million to Lithuania's central bank in April 2025—the largest AML fine ever issued in Lithuania. This fine specifically addressed compliance failures in Revolut's Lithuanian banking operations.

What compliance technology do fintechs need?

Fintechs need real-time transaction monitoring systems, AI-powered risk detection, automated investigation tools, case management platforms, sanctions screening, customer due diligence automation, and audit trail systems. These technologies must scale with business growth and adapt to evolving money laundering typologies.

Will other fintechs face similar AML fines?

Other fintechs with similar compliance weaknesses likely face increased regulatory scrutiny and potential fines. European regulators are tightening fintech enforcement, making robust AML compliance non-negotiable. Fintechs prioritizing growth over compliance risk facing similar or larger penalties.

How can digital banks and neobanks prevent AML fines?

Digital banks and neobanks prevent AML fines by implementing real-time transaction monitoring, building compliance infrastructure before scaling, maintaining robust procedures and documentation, investing in compliance expertise, conducting regular risk assessments, and ensuring board-level compliance oversight. Proactive compliance costs less than reactive remediation.

What makes Revolut different from traditional banks?

Revolut operates entirely digitally without physical branches, offers innovative products like cryptocurrency trading and instant cross-border transfers, enables account opening in minutes, and serves customers across 35+ countries from single licenses. These differences create unique AML challenges requiring specialized compliance approaches.

Is Lithuania's €3.5M fine significant for Revolut?

While €3.5 million represents a substantial penalty and Lithuania's largest-ever AML fine, Revolut's revenue scale means the financial impact is manageable. The reputational damage and regulatory implications matter more than the fine amount—the penalty signals regulatory skepticism that could delay licenses and complicate expansion.

Key Takeaways

Revolut's €3.5M fine sets precedent - Lithuania's largest AML penalty signals stricter fintech enforcement across Europe

Compliance must scale with growth - Rapid expansion without corresponding compliance investment creates systemic vulnerabilities

Real-time monitoring is mandatory - Static, rules-based systems no longer satisfy regulatory expectations

Procedural excellence matters - Technology alone doesn't create compliance; robust processes and documentation are equally critical

Fintech AML risks are unique - Speed, scale, digital operations, and innovation create challenges requiring specialized approaches

Proactive compliance is cheaper - Preventing fines through robust systems costs less than reactive remediation after regulatory action

Regulatory expectations are rising - Fintechs now face the same compliance standards as traditional banks, with penalties reflecting this shift

Cross-border operations complicate compliance - Operating in multiple jurisdictions requires harmonized standards adaptable to local requirements

Conclusion

Revolut's €3.5 million AML fine signals a fundamental shift in fintech oversight. The era of light-touch regulation has ended, replaced by expectations that digital banks meet the same standards as traditional institutions.

For fintechs, the lesson is clear: AML compliance software solutions must be a strategic pillar of sustainable business, with infrastructure built proactively rather than reactively.

Robust compliance doesn't constrain innovation—it enables it. Fintechs with strong compliance foundations scale confidently, enter new markets efficiently, and innovate without friction. Those treating compliance as an afterthought face fines, reputational damage, license delays, and business risk.

Technology makes effective compliance achievable at scale—real-time monitoring, AI-powered detection, automated investigations, and comprehensive case management identify threats while maintaining customer experience. But technology alone isn't enough; fintechs must combine platforms with skilled professionals, robust procedures, and strong governance.

Revolut's experience shows what to avoid: don't let growth outpace compliance, don't rely solely on static rules, don't neglect procedures and documentation, and don't assume innovation exempts you from standards. The fintechs learning from these mistakes will build more sustainable, valuable businesses.

Want to ensure your fintech never ends up in the regulator's spotlight? Flagright provides purpose-built AML compliance infrastructure—real-time monitoring, AI-native detection, no-code customization, cross-jurisdictional support, and centralized case management. Schedule a demo today to strengthen your defenses and support your growth.