Revolut - aiming at a new banking system
Revolut is real revolution in international banking. For, it is simplifying the way we do banking:
London-based fintech firm Revolut is now one of the world’s fastest growing digital banking and payments startup, holding a world record as well - it has a 24-billion-pound valuation in its latest funding round, which means it is more valuable than Britain’s top bank NatWest. Started about 6 years ago, it is now worth $33 billion, a sixfold increase on the $5.5 billion the company was worth in 2020. It raised $800 million in its latest funding round - from Japan’s SoftBank and New Yorkbased Tiger Global Management. The neobank, which offers banking and trading services through an app, has 15 million users across 35 countries, who avail of its services predominently in currency exchange, current account and crypto-currency services, using its over 30 in-app currencies. However, it does not have a formal banking license from the UK regulators, though it has a European banking license.
Revolut was founded by a former Lehman Brothers trader Nik Storonsky and software developer Vladyslav Yatsenko. After the latest round of funding, Storonsky has said Revolut will use the investment to expand into the Indian and US markets. It has already set up an Indian unit and appointed a chief executive. It has also announced that it will be making a multi-million-pound investment in India over the next 5 years and has committed itself to the creation of 300 new jobs.
START AS A TRAVEL CARD
Revolut was originally conceived as travel card providing cheap exchange rates. It slowly metamorphosed into a digital bank. The app it has developed was aiming to become a global financial super app. Storonsky had said he started Revolut because he was frustrated with the fact that traditional banks are taking so long to introduce digital banking services for younger customers who actually prefer to access most services through their mobile phones. In 2016, the app registered 100,000 users. In the following years, the startup became even more successful by launching more features - crypto trading and Revolut for Business, as well as premium service Revolut Metal.
In 2019, Revolut expanded across the European market and enabled open banking that would allow customers to have access to all of their external accounts in one place. It has striven to adapt to the needs of clients, giving them control. There are accounts for businesses and consumers and it offers global spending and i nternational money transfers without any hidden fees thanks to the contactless Revolut Card. It works with more than 130 currencies, giving a user the real exchange rate without having to rely on brokers or exchanges, who offer their services at a cost and often manipulate exchange rates. One can save as much as 8% on this account. Customers can also send money around the world without hidden fees.
True to its original plan, the prepaid card and the mobile banking app remain at the core of Revolut. In future, it may not at all function as a bank. One novel feature of the card is that it supports ATM withdrawals in 150 currencies, sending in 24 currencies directly from the app with no hidden fees and allowing withdrawing cash without extra charges.
Customers also have access to some of the cryptocurrencies such as Bitcoin, Ethereum, Litecoin and XRP - one can buy, hold or exchange these currencies with one of 25 different fiat currencies.
BETTER THAN A BANK
While it is not a bank in the normal sense, some of the features it offers work similarly or even better than any other bank. For example, it allows customers to prepare monthly budgets as well as spending goals, both overall and for
different spending categories. They can transfer money to other Revolut users immediately and for free. It supports direct debits, but only in euro. It uses 3D Secure online payments. It offers personal loans, phone and travel insurance, virtual cards and cryptocurrency purchase, all through the app. It works on subscription - free standard, premium, and metal.
Revolut, as a fintech startup uses technology that is being constantly updated. But, in spite of 6 years having gone by, the basic code has remained untouched, unlike traditional banks. The technology is predominantly Java 8 on the backend and AngularJS on the frontend. It also uses Kotlin, especially to build a multiplatform architecture for iOS and Android.
While Revolut has brought a breath of fresh air in the stale banking system, it is yet to surmount obstacles when competing against traditional lenders, like a customer will not rely solely on a neobank. Nevertheless, it is not a mean task for a six-year-old fintech startup to make waves in the international banking scene bringing in hitherto unknown concepts.