REVOLUT: THE BANK THAT STARTED BY TRYING NOT TO BE A BANK

Revolut’s history begins in London in 2015, but intellectually it begins somewhere more mundane: with the irritation of paying too much simply because money crosses a border.

Nik Storonsky had worked in trading at Lehman Brothers and Credit Suisse. Vlad Yatsenko came from software engineering and had worked on financial systems. Together they identified something that traditional banks had largely accepted as normal: international customers routinely paid substantial spreads and fees simply to spend their own money in another currency.

The original Revolut was radically narrower than the business we know today.

It was essentially a mobile application connected to a prepaid Mastercard, allowing users to exchange currencies and spend internationally at rates much closer to the interbank market.

Revolut joined Seedcamp in February 2015. That summer, Balderton Capital led a $2.3 million — £1.5 million — financing round. Seedcamp’s announcement at the time described the mission in unusually simple terms: eliminate hidden banking costs and make international finance fairer.

Looking back at Balderton’s original investment memo is particularly revealing because it shows how primitive the product still was.

The application was effectively just launching.

There was no crypto platform.

No stock trading.

No bank.

No lending.

No subscriptions ecosystem.

No Ultra.

No lounges.

And certainly no Tinder Gold.

There was simply a proposition that could fit into one sentence:

use one card in multiple currencies without being punished every time you crossed a border.

That was enough.

The important thing about Revolut’s first year is that it solved a highly visible consumer problem before attempting to build an empire around it.

Many financial startups do the opposite.

They begin with an empire described in PowerPoint and spend years looking for a problem.

Revolut began with the problem.

2016 — From interesting experiment to serious fintech

The following year was about proving that the initial enthusiasm had not been a novelty.

Revolut expanded its customer base, raised additional capital and began developing the product beyond its original travel-card identity.

Balderton continued backing the company and led its Series A.

By this stage, hundreds of thousands of users had begun demonstrating that cheap foreign exchange was not simply a niche requirement for sophisticated traders.

It was a mass-market consumer demand.

This was also the period in which the founders’ ambition became clearer.

Revolut was not intending to remain a clever FX utility attached to a prepaid card.

The company wanted the app to become the place where a customer controlled money generally.

That change in ambition is crucial.

Once Revolut had acquired the customer through currency exchange, it could begin asking:

What else does this customer currently do with a bank?

And then:

Why should they leave the app to do it?

That question would become the company’s entire strategic model.

2017 — The super-app starts taking shape

The Series B round in 2017 brought approximately $66 million of additional capital.

By now investors included Balderton Capital, Index Ventures and Ribbit Capital.

This was also the period in which Revolut began looking considerably less like a prepaid travel card and considerably more like an alternative financial ecosystem.

Cryptocurrency access arrived.

Business products were developed.

Premium subscriptions became increasingly important.

The expansion into crypto was particularly revealing.

Revolut did not invent cryptocurrency trading and it was not trying to compete with specialist exchanges on technical depth.

Its innovation was accessibility.

Customers who would never have opened an account at a specialist crypto exchange could suddenly buy Bitcoin from the same interface they used to buy coffee.

That is a recurring Revolut pattern.

Its competitive advantage is frequently not inventing a financial instrument.

It is removing the psychological and technical distance between the customer and the instrument.

That distinction matters enormously.

Financial institutions historically made complexity feel like sophistication.

Revolut made simplicity feel sophisticated.

2018 — Unicorn status and the banking licence that changed the company

April 2018 produced one of the first major valuation moments.

DST Global led a $250 million Series C, taking Revolut’s implied valuation to approximately $1.7 billion.

Just three years after launch, it had become a unicorn.

But the more important event came later that year.

In December, Revolut obtained a specialised banking licence through Lithuania.

That was the moment the company crossed an important conceptual boundary.

Until then, Revolut could still be described primarily as a financial-technology company distributing services through regulated partners.

A banking licence meant the possibility of becoming part of the regulated banking architecture itself.

This is where the story of Lithuania needs some precision.

Revolut did not simply abandon Britain and move its headquarters to Lithuania.

London remained the centre of the group and of management.

Lithuania became the regulatory foundation for banking activities across the European Economic Area.

That structure became even more strategically important after Brexit.

It allowed Revolut to transform itself from a British fintech serving Europe into a group with an EU-regulated banking entity capable of passporting services throughout the EEA.

This distinction matters because the phrase “Revolut moved to Lithuania” is attractive but inaccurate.

The company became multijurisdictional.

And that was a far more ambitious development.

2019 — Ten million customers and the beginning of financial ubiquity

By 2019 the numbers began becoming difficult to ignore.

Revolut says its retail customer base increased from approximately 3.5 million to 10 million during the year.

Daily active customers increased by 231%.

The number of paying customers increased by 139%.

Revenue almost tripled.

And the product catalogue was expanding rapidly.

Stock trading appeared.

Vaults allowed users to organise savings.

Donations were integrated.

Apple Pay and Google Pay support developed.

Premium and Metal subscriptions became more significant.

Airport lounges, concierge functions, insurance and other lifestyle benefits were being layered onto what had begun as a currency card. Revolut reported a 550% increase in customers paying for Premium and Metal packages from January 2018.

The company also began pushing aggressively outside Europe.

Australia entered public beta.

Singapore developed.

The United States was being prepared.

Hundreds of thousands of potential users were already on waiting lists in future markets.

This was the year when Revolut’s strategy became unmistakable.

It was not trying to build “the best current account.”

It was trying to become an interface between the individual and money itself.

2020 — A $5.5 billion valuation meets a global pandemic

February 2020 was extraordinary timing.

Revolut announced a $500 million Series D, led by TCV, valuing the company at approximately $5.5 billion.

Total capital raised had reached around $836 million.

The company already had more than 10 million customers.

Balderton noted that Revolut employed more than 2,000 people by this point — quite a transformation from the tiny operation it had backed five years earlier.

And then the world stopped travelling.

For a company whose original customer proposition had been strongly associated with international travel and foreign exchange, COVID-19 could have been existentially damaging.

Borders closed.

Flights disappeared.

Tourism collapsed.

Business travel practically ceased.

The very behaviour around which Revolut had initially built its reputation suddenly vanished.

This period therefore became an important test of whether Revolut was genuinely becoming a financial platform or remained fundamentally a sophisticated travel card.

It survived.

More importantly, the pandemic accelerated digital financial behaviour globally.

Consumers became considerably more willing to bank through apps, move money remotely and abandon branch-dependent habits.

The crisis damaged one of Revolut’s original use cases while simultaneously accelerating the larger behavioural change upon which its long-term business model depended.

That is an unusually interesting historical irony.

2021 — $33 billion: from fintech success to financial phenomenon

July 2021 marked another extraordinary revaluation.

SoftBank Vision Fund 2 and Tiger Global invested $800 million in Revolut.

The implied valuation became $33 billion.

At the time, Revolut had more than 16 million customers worldwide and was processing more than 150 million transactions per month.

This mattered symbolically as much as financially.

At $33 billion, Revolut was no longer being valued as an interesting European challenger bank.

Investors were effectively pricing the possibility that it might become one of the world’s major financial platforms.

The phrase financial super-app became central to the company’s positioning.

Savings.

Insurance.

Trading.

Transfers.

Cards.

Business banking.

Crypto.

All within a single ecosystem.

Yet 2021 also marked the point where being a bank stopped being a future aspiration in Europe.

Revolut’s Lithuanian banking operation moved into a fuller banking framework, paving the way for deposit-taking and broader banking services throughout the EEA.

The infrastructure was becoming much closer to the ambition.

2022 — Scale becomes institutional

By the end of 2022 Revolut reported more than 26 million customers across 35 countries.

That was approximately 60% growth in one year.

The workforce had almost doubled to approximately 6,000 employees.

This is where a startup begins becoming an institution whether it likes the word or not.

At 500 employees, culture can substitute for processes.

At 6,000 employees operating across dozens of jurisdictions, processes become unavoidable.

Compliance grows.

Internal controls grow.

Legal departments grow.

Risk management grows.

Human resources grows.

Regulators multiply.

The financial institution that originally differentiated itself by moving faster than banks increasingly has to perform one of the most difficult balancing acts in finance:

remain faster than banks while becoming regulated like one.

The tension has never disappeared.

In fact, it probably explains some of Revolut’s greatest strengths and several of its recurrent controversies.

2023 — The economics finally become impossible to dismiss

2023 may be the year when Revolut’s financial model proved itself.

The customer base reached 38 million, after adding approximately 11.8 million people in a single year.

Revenue increased from roughly £920 million in 2022 to £1.8 billion in 2023.

That was growth of approximately 95%.

Most importantly, pre-tax profit moved from a loss of about £25 million in 2022 to a profit of £438 million in 2023.

The pretax margin reached 24%.

Interest income alone reached around £500 million, helped by higher rates, larger customer deposits and increasingly sophisticated treasury management.

This number deserves attention.

Early Revolut economics depended heavily on transactions.

Exchange money.

Use cards.

Pay subscriptions.

Trade assets.

But once tens of billions of pounds begin sitting inside a financial ecosystem, the balance sheet itself becomes an economic engine.

Higher interest rates suddenly make customer deposits extremely valuable.

That is when Revolut starts moving from fintech economics toward banking economics.

And yet the company retained an important advantage: its revenues remained diversified.

No single product stream or geographical region accounted for more than 30% of revenue in 2023.

That is strategically significant.

Foreign exchange created Revolut.

It no longer defines Revolut.

2024 — Fifty-two million customers and one billion pounds of pre-tax profit

If 2023 proved profitability, 2024 proved scale.

Customers increased by 38% to 52.5 million.

Customer balances increased by approximately 66% to £30 billion.

Revenue grew 72% to £3.1 billion.

Pre-tax profit reached approximately £1.1 billion.

Net profit reached roughly £790 million.

These numbers create an important change in how Revolut should be analysed.

A decade earlier the natural comparison was with startups.

By 2024 that was increasingly inappropriate.

A financial institution generating more than £1 billion of pre-tax profit belongs in conversations involving banks, payment networks, brokers and large-scale financial infrastructure.

The private-market valuation followed.

A secondary share transaction during 2024 valued Revolut at around $45 billion.

An interesting aspect of these secondary transactions is that they also allow employees to monetise part of their equity.

That helps solve one of the problems created by staying private for a long time.

Employees may hold theoretically valuable stock options for years without an ordinary public market through which to sell them.

Secondary sales partly bridge that gap.

They also create something strategically valuable for Revolut:

employees see their equity becoming actual money.

That can be a formidable retention tool.

2025 — Ten years old, 68 million customers and $6 billion of revenue

Revolut celebrated its tenth anniversary with its strongest financial year.

By 31 December 2025, retail customers had reached 68.3 million.

That represented approximately 16 million new customers in one year.

Business customers reached roughly 767,000, an increase of 33%.

Customer balances rose 66% to approximately £50.2 billion — $67.5 billion.

Revenue reached approximately £4.5 billion, or $6 billion.

Pre-tax profit reached about £1.7 billion — $2.3 billion.

Net profit was approximately £1.3 billion — $1.7 billion.

The pre-tax margin reached 38%.

There is perhaps no statistic that better summarises Revolut’s transformation than another one:

eleven separate product lines were each generating at least £100 million of annual revenue.

That means Revolut had become genuinely diversified.

Cards were important.

Foreign exchange was important.

Subscriptions were important.

Interest income was important.

Wealth was important.

Business banking was important.

Credit was becoming important.

The company was no longer one successful product surrounded by experiments.

It was becoming a collection of successful financial businesses sharing one technology and distribution platform.

Lending also began becoming materially larger.

The customer lending portfolio grew by approximately 120% during 2025 to £2.2 billion, including unsecured personal loans, credit cards and an emerging mortgage portfolio.

That figure remains modest relative to the balance sheet of an established universal bank.

But strategically it is enormous.

Lending changes the nature of a financial institution.

Payments businesses manage operational risk.

Banks also manufacture credit risk.

As Revolut expands lending, one of the most important metrics to watch over the next decade will therefore not simply be customer growth.

It will be credit quality through an economic downturn.

Revolut has built much of its history during an extraordinary period of fintech expansion and, more recently, relatively supportive interest-rate economics.

Its lending book has not yet been tested through the kinds of deep multi-year credit cycles that traditional banks have endured repeatedly.

That test will come.

Every bank eventually meets the economic cycle.

2025 also changed what “working for Revolut” means

By the end of 2025 the workforce had moved above 12,000 people, compared with roughly 10,000 one year earlier.

The company attracted around 1.7 million job applications during the year and expanded its graduate and internship programmes.

This creates one of the most remarkable operational ratios in modern finance.

Tens of millions of retail clients.

Hundreds of thousands of corporate clients.

Dozens of markets.

Yet a workforce dramatically smaller than those of the major global banks.

That difference is not simply explained by the absence of branches.

It reflects the extent to which Revolut has automated customer onboarding, payments, compliance workflows, servicing, treasury, fraud monitoring and back-office processes.

And that brings artificial intelligence into the discussion.

AI at Revolut is more important behind the screen than on it

The fashionable use of AI in banking is conversational.

Every institution wants a chatbot.

That may ultimately be one of the least important applications.

The real financial transformation comes when machine learning operates in the invisible layers.

Fraud detection.

Scam identification.

Transaction monitoring.

regulatory compliance triage.

Credit assessment.

Customer-support routing.

Risk scoring.

Personalisation.

Automated document review.

Revolut’s scale makes automation less a technological luxury than an economic necessity.

A traditional bank can afford large teams manually processing exceptions.

A global app adding millions of customers each quarter cannot maintain its economics that way.

Revolut’s 2025 reporting says customer-service resolution times fell by approximately 40% while customer numbers continued increasing rapidly.

That is the positive side of automation.

The negative side appears when a customer becomes the exception.

Anyone who has dealt with modern automated banking compliance understands the paradox.

The system feels miraculous when everything works.

When something does not work, the absence of a human being with both authority and context can become infuriating.

This connects directly to my own experience with Revolut Business.

Accounts can be opened extraordinarily quickly.

But when a compliance system decides that a relationship should end, the customer may discover that twenty-first-century banking can become surprisingly medieval:

the judgment arrives first.

The explanation may never arrive at all.

Revolut is hardly alone in this.

Traditional banks do it.

American banks do it.

European banks do it.

Fintechs do it.

regulatory compliance obligations, sanctions regulation, fraud monitoring, correspondent-bank requirements and internal risk appetite have produced a banking culture increasingly willing to terminate relationships rather than understand them.

But Revolut’s automation makes the contradiction particularly visible.

A financial relationship can be created in seven minutes.

Apparently explaining why it has been destroyed sometimes requires technologies humanity has not yet invented.

2025 — the valuation moves to $75 billion

The capital story also continued.

A secondary share transaction in late 2025 established a valuation of approximately $75 billion.

Participants reportedly included major institutional investors and strategic technology capital.

The significance of secondary sales needs emphasising.

Unlike a traditional fundraising round, secondary transactions frequently involve existing shareholders — including employees — selling shares.

The company may therefore receive little or none of the proceeds directly.

But they establish an observable market price for a privately held business.

That is why describing Revolut as having a “market capitalisation” requires care.

It has no continuously traded stock-market capitalisation because it is not listed.

It has a private-market valuation derived from transactions involving its shares.

This distinction may sound technical.

For a financial publication, it matters.

2026 — Revolut begins looking less like a European fintech and more like a global banking network

And this brings us to the present year.

By September 2026, Revolut says it has passed 80 million retail customers worldwide.

Its current growth rate implies roughly one million additional customers every 17 days, and the company has publicly targeted 100 million customers by mid-2027.

But 2026 is principally a licensing story.

The company is assembling regulated banking infrastructure market by market.

That changes everything.

Britain: finally a fully operating bank

It is worth remembering the irony.

Revolut was born in London.

Yet becoming a fully authorised operational bank in its home market took far longer than acquiring banking permissions elsewhere.

The UK authorisation process became one of the longest-running questions surrounding the company.

Regulators examined governance, risk controls, reporting systems and other institutional issues.

That delay mattered reputationally.

How could one of Britain’s most valuable fintech companies call itself a global banking challenger while not yet operating as a complete bank in Britain?

The answer finally arrived.

In 2026 Revolut became fully operational as a UK bank.

This should be considered one of the most important milestones in the company’s history.

A UK licence is not merely another regulatory permission.

It is validation in the jurisdiction where Revolut was created.

And it allows eligible UK customer deposits to sit inside the regulated banking framework with the applicable domestic deposit protection regime.

Australia: another banking licence

On 21 July 2026, the Australian Prudential Regulation Authority granted Revolut Payments Australia Pty Ltd an authorised deposit-taking institution licence.

APRA simultaneously authorised the group’s local holding-company structure.

This is not a minor payment licence.

ADI status places Revolut within Australia’s prudential banking architecture.

And Australia is one of the world’s most concentrated developed banking markets.

A small number of traditional institutions have historically dominated retail banking.

For Revolut, entering such a market as a bank rather than simply a payments application is a strategically significant escalation.

France: an increasingly important continental base

Then came France.

In 2026 Revolut secured a French banking licence and announced a significant institutional presence in Paris.

That adds another layer to the Lithuania question.

Lithuania remains crucial to Revolut’s European history and infrastructure.

But the future increasingly appears to involve local banking institutions in strategically important markets rather than one Lithuanian entity serving everything indefinitely.

This is the normal evolution of a business becoming systemically important.

Passporting is efficient.

Local licences create deeper regulatory relationships, local product flexibility and potentially greater political legitimacy.

Revolut is moving from one European banking hub toward a federation of regulated institutions.

That looks much more like the architecture of a global bank.

September 2026 — America changes the scale of the ambition

Then, on 3 September 2026, came perhaps the most symbolically important licence announcement yet.

The US Office of the Comptroller of the Currency granted Revolut conditional approval for a national banking charter.

Revolut still needs additional approvals, including from the FDIC and Federal Reserve, before the American bank becomes fully operational.

But the strategic direction is clear.

The proposed bank will be based in Stamford, Connecticut.

Revolut plans approximately $95 million of investment and around 160 jobs.

The intended product range includes current-account-style services, credit cards, instalment lending, foreign exchange and eventually broader banking functionality.

Revolut intends to launch the bank around 2027.

This is a significant departure from the model under which many foreign fintechs enter America by partnering with existing regulated banks.

Revolut wants its own charter.

That means accepting the costs and obligations of becoming a bank in exchange for controlling more of the economics, infrastructure and customer relationship.

This is precisely what Revolut’s history has been moving toward for a decade.

First it depended upon banks.

Then it competed with banks.

Now it increasingly wants to be the bank.

From $1.5 million to $115 billion

There is a wonderfully absurd symmetry in the capital story.

In 2015, Balderton’s first institutional investment was approximately £1.5 million.

Eleven years later, contemporary private-market discussions have placed Revolut’s valuation around $115 billion. Recent reporting places it among the most valuable private financial-technology companies anywhere in the world.

Naturally, one should resist the temptation to draw a perfectly smooth exponential line between those points.

Private valuations move with interest rates, investor sentiment, market liquidity and transaction structure.

A $115 billion private valuation does not mean somebody could sell every share tomorrow for $115 billion.

Nor does it mean an eventual IPO will necessarily occur at that number.

Private markets are not public markets.

But the scale of wealth creation remains extraordinary.

A company initially funded with millions has created equity value measured in tens of billions.

That is precisely why Revolut will eventually face another unavoidable question.

When will Revolut go public?

Revolut has repeatedly been discussed as a potential IPO candidate.

At its current size, the absence of a listing is becoming almost as notable as a listing would be.

There are obvious advantages to remaining private.

Management avoids quarterly public-market pressure.

Reporting remains less burdensome.

Strategic decisions can be made with a longer horizon.

Employees and investors have obtained liquidity through secondary transactions.

And private capital remains willing to finance the company.

But there are limits.

An enterprise worth tens of billions ultimately accumulates large numbers of shareholders who require liquidity.

Employee ownership becomes harder to manage.

Acquisitions become more difficult to fund with illiquid shares.

Public visibility increases anyway.

Eventually the advantages of being private begin diminishing.

The interesting question is therefore no longer whether Revolut could list.

It is whether management sees any reason to hurry.

So far, apparently, it does not.

A company that can command private-market valuations above many listed banks has relatively little reason to subject itself prematurely to public markets.

The most revealing Revolut metric may not be customers

Eighty million customers sounds spectacular.

It is spectacular.

But the deeper banking statistic is different.

How much of their financial lives do those customers actually entrust to Revolut?

A user who keeps €300 in Revolut for holidays is not economically equivalent to someone whose salary arrives there, whose mortgage is there, whose savings are there, whose investment account is there and whose company uses Revolut Business.

This is why Revolut’s disclosure that the number of customers using it as their primary financial account increased by approximately 45% during 2025 is strategically important.

Customer acquisition built the company.

Share of wallet will determine the bank.

That is the next phase.

Revolut no longer needs merely to convince people to download it.

It must persuade them to trust it.

There is an enormous difference between those verbs.

The battle for deposits

Customer balances reached approximately $67.5 billion by the end of 2025, having increased 66% in one year.

This provides Revolut with something every bank wants:

cheap and increasingly sticky funding.

But deposits create responsibilities as well as economics.

Once customers move salaries, emergency savings and corporate liquidity into your ecosystem, service interruptions and compliance errors cease being technical inconveniences.

They become potentially life-altering events.

A blocked holiday card is irritating.

A frozen operating account can prevent a company from paying salaries.

That difference matters.

The closer Revolut gets to becoming people’s primary bank, the higher the standard to which it should be held.

And this is perhaps the great trade-off facing every digital bank.

Customers grant you more trust because the app works beautifully.

Eventually that trust means they also give you more money.

At that point you inherit all the responsibilities the old banks had.

Technology does not repeal fiduciary gravity.

The employee story is equally extraordinary

The early Revolut team could fit comfortably inside a small office.

By 2020 there were more than 2,000 employees.

By 2022, nearly 6,000.

By 2024, more than 10,000.

By the end of 2025, approximately 12,200.

Current 2026 recruitment material indicates a workforce above 13,000 people worldwide.

And they are not concentrated in London.

Lithuania remains important because of banking regulation.

Poland has been a major operational and technology location.

Portugal, Spain, Ireland, Germany, Romania and other European centres contain substantial teams.

India has become increasingly important for engineering and operations.

Latin America is growing.

Dubai supports Middle Eastern ambitions.

The United States will now add banking personnel in Connecticut.

This workforce geography tells us something important about modern finance.

A global bank no longer requires its global employees to sit in London, New York, Paris, Frankfurt or Zurich.

Revolut can distribute product development, compliance, engineering, customer service and operations across dozens of countries while giving users the impression of dealing with one institution.

That is an enormous structural advantage.

But again, it carries an operational challenge:

customers see one Revolut.

Regulators see a complicated collection of legal entities.

That gap between brand simplicity and legal complexity is one of the defining features of twenty-first-century finance.

How innovative is Revolut, really?

This is the question I find more interesting than the valuation.

Because almost every individual Revolut function existed somewhere before Revolut offered it.

Currency exchange existed.

Prepaid cards existed.

International transfers existed.

Stockbrokers existed.

Crypto exchanges existed.

Savings accounts existed.

Travel insurance existed.

Money-market funds existed.

Airport lounges certainly existed.

Even dating existed before Revolut bravely entered that strategic sector.

So where exactly is the innovation?

Integration.

Revolut’s fundamental innovation is not necessarily financial invention.

It is the industrialisation of integration.

It takes products historically distributed through separate institutions and places them behind one identity, one interface and one customer relationship.

That has enormous behavioural value.

Every additional product reduces the reason to leave.

Each product increases engagement with every other product.

The current account feeds the card.

The card generates points.

The points feed travel.

Travel encourages currency conversion.

Currency exchange encourages international usage.

International usage makes the eSIM attractive.

Savings keep money inside the ecosystem.

Investments increase balances.

Business customers create payment volumes.

Subscriptions reinforce loyalty.

This is not a collection of unrelated features.

It is an ecosystem architecture.

And that architecture increasingly resembles what technology companies learned years ago.

Apple does not need to manufacture the world’s best product in every category.

It needs the products to become more valuable together than separately.

Revolut is trying to do that with finance.

Wise understood transfers. N26 understood digital banking. Revolut understood breadth.

Wise remains, in my view, one of the cleanest propositions in international money movement.

Its transparency is admirable.

Its purpose is obvious.

Move money efficiently.

N26 built a highly polished European digital-banking proposition.

Monzo created extraordinary consumer engagement in Britain.

Starling built excellent banking infrastructure.

bunq pioneered flexible European digital banking.

Chime understood the mass-market American consumer.

Each has strengths.

I have already analysed the advantages and disadvantages of these platforms in a previous Substack comparison, and I would refer readers to that separate analysis for the detailed product-by-product discussion.

Roberto Balbino

Europe’s Digital Banking Revolution

The European banking industry is undergoing one of the most significant structural transformations in its history…

Read more

2 months ago · Roberto Balbino

But strategically Revolut chose something different.

It kept expanding sideways.

That created complexity.

It also created optionality.

Revolut does not have to win every category.

It needs enough categories to make leaving inconvenient.

That may be an even more powerful strategy.

The great irony: the fintech that hated bank fees now sells a €55-a-month bank account

And here we arrive at one of my favourite Revolut contradictions.

The company was founded largely because traditional banks charged customers too much for financial services.

Today Revolut will quite happily charge me €55 per month for Ultra.

Capitalism does have a sense of humour.

To be clear, I willingly pay it.

That does not mean I have to pretend it is inexpensive.

The economics work beautifully for particular users.

An internationally mobile person moving significant sums between currencies can save considerable money.

A frequent traveller can extract value from lounges, insurance, Fast Track and eSIM benefits.

Someone conducting numerous trades or international transfers may save transaction costs.

A person already paying separately for several included partner subscriptions may reduce other expenditure.

But many users do none of these things.

They may simply enjoy having a shiny card and an impressive collection of benefits that they rarely activate.

For that customer, the calculation becomes considerably less compelling.

€540 per year is real money.

The theoretical retail value of fifteen services one never intended to buy is not.

That point is too often lost in subscription economics.

Tinder Gold, brought to you by your financial institution

I remain fascinated by this.

Ultra customers in eligible markets can receive Tinder Gold.

There is something almost philosophically complete about it.

Revolut began by managing our currency risk.

Then our investment risk.

Then our travel risk.

Apparently relationship risk was the obvious next frontier.

Traditional bankers used to discuss cross-selling mortgages and insurance.

Somewhere inside Revolut someone apparently asked the more important question:

“What if the client is single?”

You have to admire the vertical integration.

Perhaps future versions will identify that a customer has spent too many evenings buying ETFs and automatically activate a dating profile.

AI does need a purpose.

Joking aside, Tinder illustrates exactly why subscription “value” should be treated carefully.

If you already use Tinder Gold, it has monetary value.

If you are happily married, it may have a slightly different kind of value — although perhaps not one Revolut should encourage.

And if you simply have no interest in it, the theoretical saving is zero.

Benefits are not cash.

They become economic value only when they replace something you actually wanted.

Travel insurance: another example of the difference between a headline and a life

I also consider Revolut’s travel insurance useful.

But one needs to understand precisely what it is.

For Metal, the maximum covered trip is currently around 30 days.

For Ultra, it is approximately 90 days, subject to policy conditions.

That is much better than I initially remembered for Ultra.

But the conceptual limitation remains.

The insurance is structured around a conventional trip that begins from the customer’s primary residence and ends there within the permitted period.

This works very well for what most people call a holiday.

Milan.

Two weeks in Thailand.

Milan again.

Perfect.

But some international lives no longer work that way.

A person may be resident for tax purposes in one country, maintain a professional domicile elsewhere, spend three months in Latin America, travel onward to the United States and have no predetermined reason to return to the original country before continuing somewhere else.

That is not “a trip” in the traditional insurance sense.

It is simply life.

Revolut travel insurance therefore should not be confused with genuine international private medical insurance.

The latter is designed around a person.

Travel insurance is designed around a journey.

That sounds like semantics until you need to make a claim.

Then it becomes extremely concrete.

And this is precisely why I remain both critical and positive

The easiest way to review a financial company is to choose a side.

Revolut is brilliant.

Or Revolut is terrible.

Both positions are intellectually lazy.

I use Revolut extensively.

I pay for Ultra.

I appreciate the app.

I value the foreign-exchange architecture.

I like the integration.

I believe the founders saw the future of retail financial behaviour earlier than much of the banking establishment.

And I also think some subscription economics deserve scepticism.

I think insurance conditions should be understood rather than admired from a benefit screen.

I believe unexplained account closures are unacceptable from the perspective of the customer even where the compliance rationale may be legally defensible.

I believe automation is magnificent until it becomes an automated wall between a person and their own money.

And I believe Revolut’s growing institutional scale now requires the company to be judged less like a startup and more like the bank it increasingly wants to become.

That is not hostility.

It is the opposite.

The more important an institution becomes, the less useful uncritical admiration becomes.

The next ten years will be harder than the first ten

This may sound counterintuitive.

Revolut has survived its startup phase.

It has capital.

It has customers.

It has banking licences.

It has a brand.

It is profitable.

Its valuation has become enormous.

Surely the difficult part is over.

I am not convinced.

The first decade required proving that millions of customers wanted something better.

The second decade requires proving that something better can become something durable.

That means lending safely through recessions.

Managing fraud at global scale.

Maintaining adequate capital.

Handling cyber threats.

Surviving regulatory scrutiny in dozens of jurisdictions.

Providing due process when automation fails.

Protecting deposits.

Managing increasingly complex balance-sheet risks.

Keeping customer service human enough.

And somehow continuing to innovate while becoming a regulated institution with tens of millions of customers.

Startup growth is difficult.

Banking permanence may be harder.

JPMorgan has roots stretching back more than two centuries.

Santander was founded in the nineteenth century.

HSBC dates to 1865.

Revolut is eleven years old.

That is the scale on which financial history ultimately judges institutions.

What would failure now look like?

It probably would not mean Revolut disappearing.

At this scale, the more realistic failure would be subtler.

Becoming ordinary.

Adding bureaucracy.

Increasing fees.

Losing customer-service quality.

Allowing regulation to slow product development.

Building so many services that the interface becomes the very complexity it originally replaced.

Turning a financial super-app into an electronic supermarket in which nobody remembers why they entered.

That is a genuine strategic risk.

When every product is inside the app, product discipline becomes more important rather than less.

There is a point beyond which adding another subscription does not create financial innovation.

It creates a catalogue.

The company must know the difference.

What success would look like

Success would be extraordinary.

Imagine Revolut in 2035.

Hundreds of millions of customers.

Locally licensed banks across every important continent.

Salaries.

Mortgages.

Credit.

Investments.

Corporate payments.

Foreign exchange.

Savings.

Insurance.

Private banking.

Potentially AI-based financial management.

A customer could move from university to employment, launch a business, buy a house, invest, travel internationally and eventually manage substantial wealth without leaving the same financial ecosystem.

That would represent something the banking industry has attempted for decades but rarely achieved globally:

a genuinely international retail financial relationship.

Traditional banks are usually global at the corporate level but local at the consumer level.

An HSBC customer moving from Britain to Mexico does not necessarily experience one seamless global financial identity.

A Santander customer in Spain and one in Brazil interact with related but operationally distinct banking systems.

Revolut’s ambition is different.

The app attempts to make geography almost disappear.

Regulation prevents it from disappearing completely.

But technologically, the customer increasingly experiences one financial interface.

That could become the most disruptive element of all.

From foreign exchange to financial identity

That is why the history of Revolut is larger than the history of a fintech.

It tells us how banking itself is changing.

The twentieth-century bank was organised around institutions.

Your current account belonged to one department.

Investments to another.

Insurance to another company.

Foreign exchange to a specialist desk.

International transfers moved through correspondent banks.

The customer travelled through the financial system.

Revolut tries to invert that relationship.

The financial system travels with the customer.

That may ultimately be its greatest innovation.

Not the card.

Not crypto.

Not free transfers.

Not stock trading.

Not Ultra.

Not even Tinder.

The real idea is that your financial identity should move with you.

Across countries.

Across currencies.

Across products.

Across stages of life.

If Revolut succeeds in making that concept ordinary, its influence will be considerably larger than its eventual valuation.

Because the defining sign that a financial revolution has succeeded is not that one company dominates forever.

It is that eventually everyone else is forced to behave differently.

And in that sense, Revolut has already won part of the argument.

Traditional banks now offer instant notifications.

Virtual cards.

Integrated FX.

Digital onboarding.

Investment services inside apps.

Real-time budgeting.

Subscription management.

Mobile-first support.

Features that were remarkable ten years ago are increasingly expected.

Revolut did not invent them all.

But it helped make their absence unacceptable.

That is a more meaningful form of disruption than any funding round.

FINAL THOUGHT: THE BANK THAT REMINDS BANKS WHAT CUSTOMERS ARE FOR

I started this analysis asking what Revolut really is.

A bank?

A fintech?

A broker?

A payments company?

A currency platform?

A lifestyle subscription service?

A technology company with banking licences?

The answer is increasingly:

yes.

That ambiguity is not accidental.

It is the strategy.

Revolut’s objective appears to be owning enough of the financial relationship that categorical definitions become increasingly irrelevant to the customer.

And despite the criticisms I have made throughout this article, I find the project fundamentally impressive.

I am sufficiently unconvinced by some aspects of Ultra to question its price.

Yet I pay for Ultra.

I find some of the bundled subscriptions unnecessary.

Yet the range is impressive.

I find the travel insurance too conventional for genuinely international lives.

Yet it is useful within its intended limits.

I have experienced corporate account closures that I considered arbitrary and poorly explained.

Yet I continue to use Revolut personally.

That may sound inconsistent.

I think it is simply what being a customer means.

One does not need to join a fan club every time one opens a bank account.

The ability to identify weaknesses in something does not reduce appreciation of what it gets right.

Quite the opposite.

And what Revolut got right was enormous.

Two founders looked at international banking in 2015 and noticed that a large proportion of its complexity existed because customers had historically tolerated it.

They stopped tolerating it.

Eleven years later the company has around 80 million customers, a private valuation discussed around $115 billion, licences across major jurisdictions, billions in annual revenue, tens of billions in customer balances and ambitions to serve 100 million people by mid-2027.

That does not happen by accident.

Nor does it happen because of a fashionable app interface.

It happens because the founders understood a structural change in consumer expectations before most established banks did.

People were prepared to trust a financial institution without marble branches.

They were prepared to manage money from a phone.

They expected currency exchange to happen instantly.

They expected financial products to be accessible around the clock.

They expected an international life to have an international bank.

Those expectations now appear ordinary.

In 2015 they were not.

That is why, despite everything, I would still describe Revolut as one of the most interesting financial projects of our generation.

Not perfect.

Not cheap in every configuration.

Not without operational and regulatory questions.

Not immune to the occasional absurdity of modern subscription capitalism.

But unquestionably important.

And perhaps the greatest compliment I can give Revolut is that after only eleven years, much of what once made it revolutionary no longer feels revolutionary at all.

It simply feels like how banking should work.

Except perhaps the Tinder Gold.

I am willing to leave that innovation exclusively to Revolut.

Roberto Balbino — CEO, Fintech SCB

Independent analyst of finance, economics, geopolitics and global markets.

www.fintechscb.com⁠