Revolut: The most aggressive financial institution in Europe | EUROtoday

Nik Storonsky would not lack self-confidence, though he typically appears a bit reserved when making public appearances. The conventional banks don’t have any probability towards Revolut, says Storonsky. “Our product is so much better. It’s impossible to compete against us,” claimed the 41-year-old founder and CEO of the digital financial institution when he just lately inaugurated the brand new headquarters within the coronary heart of London’s monetary district. The Revolut app is “the most successful digital banking model in the world,” enthuses the brand new Western Europe boss Béatrice Cossa-Dumurgier.

Looking on the numbers, it is laborious to disagree. Since its founding in 2015, the fintech firm has shaken up the banking world. Currently, greater than fifteen million customers are added yearly. There at the moment are greater than 65 million prospects in forty nations. Storonsky’s aim: He needs 100 million prospects in 100 nations by mid-2027. “We want to become the first truly global bank,” he says. The mission is “simple”. Hardly every other firm within the monetary sector is working so laborious on enlargement and internationalization.

The aggressively rising competitor is spreading concern and terror amongst conventional banks and fintech opponents. No different digital financial institution is rising so rapidly. It is primarily younger, price-conscious prospects who select Revolut’s monetary app. In Germany, the neobank has elevated its variety of prospects to 2.5 million, rising by 60 p.c yearly. By 2027 there must be 5 million prospects. “We have very big ambitions for Germany, it is one of the most important and exciting markets in Europe,” says Cossa-Dumurgier in an interview with FAS. She has been heading the brand new European headquarters in Paris because the summer time.

Western Europe is the financial institution’s focus, however it’s now increasing far past that. Twelve million prospects use the Revolut app in Great Britain, and several other million every in France, Ireland, Spain and Italy. But Revolut can also be energetic in Australia and Brazil. The financial institution just lately launched in Mexico and can subsequent enter the Indian market. No different financial institution is increasing as aggressively as Revolut.

In 2019, 4 years after it was based, Revolut had already gained ten million prospects. In 2022 there have been a complete of 20 million. The conventional banks in Germany, too, that are battling their “legacy” – the costly department networks, typically outdated IT buildings and the excessive variety of workers – can hardly sustain with the agile monetary app. “A very serious competitor is emerging,” says a Frankfurt banking professional. Cossa-Dumurgier believes that she will be able to notably poach prospects from financial savings banks and direct banks. Postbank and Sparda-Bank additionally must arm themselves.

Revolut has additionally change into a threatening competitor for the German on-line banks N26 and Trade Republic. According to latest info, the Berlin neobank N26 has 4.8 million energetic prospects in 24 European nations, however the monetary regulator Bafin has repeatedly restricted progress on account of deficiencies in threat administration. Trade Republic serves round ten million prospects. But progress is considerably slower than Revolut.

The London-based fintech’s meteoric rise can also be mirrored in its exceptionally excessive valuation. The financial institution, which isn’t listed on the inventory trade, was valued at 75 billion {dollars} (round 65 billion euros) in the latest financing spherical. This makes Revolut by far essentially the most precious fintech firm in Europe. For comparability: Trade Republic was just lately valued at 12.5 billion euros. In the summer time of 2024, Revolut’s valuation was solely $45 billion. The new milestone displays “the enormous development of the last twelve months,” says Storonsky.

75 billion {dollars} – that’s greater than the market worth of banking giants akin to Nat West and Lloyds in main banks or Deutsche Bank. Revolut was briefly much more precious than Barclays Bank. And that regardless of – or exactly as a result of – the fintech is so lean when it comes to personnel. Revolut solely employs simply over 10,000 folks, Barclays has round 85,000 worldwide and Deutsche Bank has just below 90,000. A small variety of workers means huge price financial savings.

There is nice curiosity from buyers. The US asset supervisor Fidelity and the chip firm Nvidia, which has a very good nostril for tech developments, took half within the newest spherical of financing. The Japanese Softbank was one of many early buyers. If Storonsky manages to extend the valuation to $150 billion, he’ll obtain a bonus value a number of billion {dollars}, it’s mentioned, though the small print are usually not public. He could possibly be in for a windfall like Elon Musk at Tesla.

Russian-born Storonsky and his Ukrainian co-founder Vlad Yatsenko have already change into multi-billionaires. No different start-up founder has achieved such a meteoric rise because the Revolut boss. He was born in a small city close to Moscow in 1984 and was nationwide swimming champion as a teen. After learning physics and finishing a grasp’s diploma in economics at a college in Moscow, Storonsky moved to London in 2004. For a couple of years he labored within the metropolis as a securities dealer for Lehman Brothers, and after the monetary disaster he went to Credit Suisse. At the age of 30, he arrange his personal enterprise and developed the thought for Revolut with Yatsenko.

For the primary six months he labored virtually continuous in a Starbucks espresso store, “until I couldn’t stand the smell in my clothes anymore,” he mentioned when he opened the brand new headquarters in an elegant high-rise in London’s Canary Wharf monetary district a couple of weeks in the past. The new seat can also be a present of pressure. It could not be extra consultant. When hundreds of bankers step out of Canary Wharf tube station each morning, they give the impression of being immediately on the Revolut emblem. Deutsche Bank may also transfer into the identical constructing. This appears symbolic: the standard German bankers will likely be sitting beneath Revolut sooner or later.

The neobank has been worthwhile for greater than 4 years. In the final monetary 12 months, the financial institution achieved revenue earlier than taxes of 1.4 billion {dollars}. That was a rise of 149 p.c over the earlier 12 months, pushed by the booming crypto buying and selling enterprise. Initially, the monetary platform attracted prospects primarily via cash transfers and low cost foreign money exchanges. An affordable checking account and a financial institution card attracted customers. Trading in crypto belongings has been potential by way of the Revolut app since 2017, and shares and ETFs have been added in 2024.

The product vary is rising quickly. “We have pioneered money market accounts, lifestyle products, shared accounts, elite offerings such as Revolut Ultra, eSIM and much more. Over the last decade we have brought more innovation to market than any other European bank,” claims a Revolut spokesperson.

Béatrice Cossa-Dumurgier, who was beforehand a supervisor at BNP Paribas for a few years, is now establishing the brand new Western European headquarters in Paris. Revolut speaks of an funding of multiple billion euros. Just over 400 workers are anticipated to work on the Western Europe headquarters. In Germany, the financial institution solely has a small group primarily based in Berlin, and round fifty new workers are presently being employed. Every small financial savings financial institution has that a lot.

Revolut’s buildings are extraordinarily lean, which implies the financial institution can maintain prices low. Basically, all the firm primarily consists of an IT platform on which new merchandise are continually being arrange. Newly acquired prospects solely imply a couple of additional bits and bytes; they solely incur low prices, for instance for complicated promoting campaigns, particularly on social media. Revolut additionally needs to introduce particular merchandise within the German market. “Overdrafts, for example, are a very German specialty,” says Cossa-Dumurgier.

Revolut will regularly additionally need to supply basic mortgage financial institution loans throughout Europe, mentioned advertising director Antoine Le Nel. In some nations akin to Ireland, AI assistants are already being examined that fully digitize the mortgage utility course of. However, the market launch in Ireland has been delayed and can now solely start in 2026. So far, Revolut has solely provided dwelling loans in Lithuania, the place laws make refinancing notably low cost.

Revolut has had a banking license for the EU for years, issued by the Lithuanian central financial institution. The digital financial institution is supervised by the Central Bank of Lithuania and the European Central Bank (ECB). It was solely within the dwelling market of Great Britain {that a} banking license did not work out for a very long time. Revolut’s utility was caught for nearly 4 years. It was solely this summer time that the supervisory authority issued a – to this point nonetheless restricted – license. According to media reviews, the supervisory authority hesitated for therefore lengthy as a result of it was involved that the financial institution’s threat controls wouldn’t be capable to maintain tempo with the speedy worldwide progress of the enterprise. Revolut now has a “license in mobilization” and is presently solely allowed to just accept deposits of a restricted quantity.

Barclays CEO CS Venkatakrishnan just lately mentioned at a monetary convention that Revolut had really benefited from not having a full banking license. This meant that the financial institution needed to fulfill fewer supervisory obligations. But Revolut and different neobanks have angrily rejected this. They must meet the very same requirements as others.

Nik Storonsky is described within the firm as a troublesome, demanding boss. The financial institution founder, who nonetheless seems youthful with a half-length blonde coiffure, is an absolute workaholic himself. The father of 4 as soon as mentioned that 99.5 p.c of his life consists of labor. He virtually by no means takes trip. His hobbies embrace kite browsing.

According to media estimates, he owns round a fifth of Revolut shares. At a valuation of $75 billion, that is an extremely giant fortune. The Revolut founder was nicely on his technique to turning into one in all Britain’s ten richest males. However, as just lately grew to become recognized, he has moved his residence to the United Arab Emirates, a tax haven. The London monetary regulator was not blissful once they discovered about this from the newspaper.