LFP075 – Managing Fintech Rebundling with Nikolay Storonsky CEO of Revolut

One of the founding ethos of Fintech was “unbundling” – the slicing of FS into single-issue firms. This is now looking old-hat. Revolut acquired 500,000 customers in less than two years by offering interbank rates on FX transfers and so was one of the most successful of Fintech 1.0.

Now they are leading the way with Fintech 2.0 offering a whole range of products. Managing this transition with respect to both “the brand” and “the app” is not trivial and I am delighted to be joined today by co-founder and CEO Nikolay Storonsky.

Unlike Monzo who have gone down the banking route but Revolut have remained with the simpler/cheaper/faster but narrower e-money issuer licence.


Topics discussed on the show include:

  • my incompetence with recording buttons [there are two lower quality patches of audio, but never mind :-D]
  • watersports & kite surfing
  • Nike’s background in trading at CSFB
  • Nik’s decision to move on and starting up in FX/money transfers due to his personal pain in this area (cf Nigel Verdon, founder of Currency Cloud in LFP024)
  • the importance of low boredom thresholds to folks who make things happen in business – an intolerance to boredom can be a good thing
  • marketing-driven Fintechs vs FS-background Fintechs
  • “Transferwise didn’t really invent anything new … it was more like a marketing machine”
  • “What we really do well, we really add value to people .. at the moment you will not find any company in the market who will  bring more value than we because we simply give interbank rates and we think FX should be free”
  • how Revolut produced this value to give away to customers – “their edge” – generating interbank rates via their in-house system (cf automated market makers), automated risk-management, connected to multiple banks, multiple brokers, more sophisticated/complex than just doing “peer-to-peer”
  • “for us the cost of exchanging money is negligible”, “we choose to give interbank rates to customers as a benefit and then effectively as the whole business model we cross-sell other services”
  • “so by giving away free FX rates we are able to drive unbelievable customer acquisition growth with zero marketing spend
  • the whole value chain of internal bank departments who have to take value out of any client deal & relative lack of automation
  • SoFi having recently raised $500m and being the prime example of a Fintech 2.0 Rebundling
  • managing the brand changes from being know for X to being known for X, Y, Z and planning A, B, C
  • customer-driven product-development
  • deciding on a label when one isn’t a bank (which at least is a simple label…)
  • managing software development when one starts with a simple app dong one thing but moves to a complex app doing many things; the importance of modular code development
  • WeChat as the example of a multi-service/product offering with a simple interface
  • Revolut have six designers dedicated to keeping the user interface simple and clear
  • the Revolut App gets 4.5/5 on Google Play (Monzo 4.1 and Atom Bank 2.3/5)
  • the rationale behind choosing the e-money licence; in-line with the core philosophy of doing things in the easiest way
  • Revolut are connecting to FPS (the UK Faster Payments System)
  • internationalisation – e-money licences as a faster way to expand (all of the UK app-only banks are by contrast “just” in the UK and not planning to expand)
  • Revolut cover the whole of Europe
  • the plans for launching a Revolut for Business product in May – more than 8,000 companies are registered already like Virgin Atlantic Emirates

And much much more 🙂

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