The newest entrant to the U.S. digital financial services wars is coming to your app stores, although the exact timing is unclear since the launch has been delayed multiple times due to technical obstacles.
Revolut, a digital financial services company is set to take on digital and physical providers of financial services in the U.S. Founded in 2015 by Nikolay Storonsky, an ex-Lehman and Credit Suisse trader, and Vlad Yatsenko, a former Credit Suisse and Deutsche Bank developer, its goal is “modest” – to become the Amazon of banking. Revolut started out with a prepaid currency card. However, in contrast to many digital providers that concentrate on doing one thing really well, Revolut believes that its success lies in offering multiple products and services to multiple markets. Today, it offers a range of both personal and business financial services (most digital offerings have focused on one segment or the other) and is set to launch in the U.S.
Personal services include basic, premium and metal bank accounts, with an escalating level of perks, and an array of “products,” such as global money transfers, a savings tool, a budgeting tool, a Perks offering (currently in Beta testing) and cryptocurrency exchange. On the business side, it offers a corresponding set of packages called Start, Standard and Professional. The basic tier is free on the personal side and with a low monthly fee on the business side, while the premium tiers each have a corresponding monthly fee.
This formula seems to be working. Its valuation has grown from $350 million to $1.7 billion in the past year, and while exact financials are not available, Revolut announced in 2017 that it had reached break even in terms of profit. Since then the customer base has grown by an estimated 1 million, according to an article in Forbes.
There are other providers that also offer a wide array of products and services to their markets, such as Moneysupermarket in the U.K. While Moneysupermarket offers an extensive number of products and providers per category, Revolut aims to differentiate itself by “providing the best product in every category.”
Whether Revolut lives up to its name and become a significant market disruptor in the U.S. remains to be seen. What is clear is that both traditional financial services and digital providers face increasing competition across the board from each other and new entrants to the industry, and all must continue to innovate and pay close attention to their customers’ needs and preferences in order to survive.