The banks? “Their profits are bound to decline. The biggest ones will survive, the others won’t “. Nik Storonsky, 35, founder and CEO of Revolut, is an entrepreneur with few frills. He doesn’t like to waste words and carefully chooses each sentence to get right to the point. It shuns unnecessary Byzantinisms and does not hide the ambitious goals of the company that aims to raise $ 1.5 billion in equity and convertible loans to become the largest fintech in Europe: “We were born four years ago and have over 8 million customers , in Italy we have 300 thousand but we will reach half a million before the end of the year. We are aiming for one million by 2020 and 5 million in five years. The trend is marked ”.
The birth of Revolut was marked by a real declaration of war on the banking world, now the tone has changed, but the goal is the same: to revolutionize the market to “always put the customer at the center. We have the banking license and we will increase our services more and more, but we do not want to create unnecessary structures. For us it is essential to save our users by providing them with what they need “.
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On the other hand, four years ago it was hardly imaginable that the banking world would crumble so quickly under the blows of negative rates and the entire fintech sector. Yet it is really happening: “First the banks laughed at us, then they tried to copy us. And in the end they realized that they can’t do it because their trials are too long ”.
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Beyond Storonsky’s successful intuition – which has bet on the quantity of transactions, drastically reducing the costs for the end user -, one of the keys to Revolut’s success is the speed of thought and action: “Five years ago the market was a prairie, anyone could come in and try to launch their fintech. Today, the scenario has completely changed. There are barriers to entry that once did not exist because those who left with us are far ahead. And for a start-up it would be almost impossible to bridge the gap “.
Reason why the entrepreneur does not seem worried about Revolut’s negative margins: “The core business is already in profit, but we have decided to continue investing a lot of money on the growth of the company. Now it’s not important to make a profit. Just like it happened with Amazon ”. As if to say that the collection of money and investments in recent months have been functional to widen that gap with any start-ups that want to enter the market, but also to reduce the distance from the world of banks.
Storonsky even talks about the “Amazon moment” to explain the epochal change that the banking sector is going through: “Fifteen years ago, Amazon upset the retail market. A lot of small shops have closed and a lot of big chains have gone into crisis. It is the same disruption that the financial sector is experiencing. Today, stores have stopped waging war on Amazon and are exploiting its potential starting with its infrastructure. Banks could do the same thing. The regulations now allow it. The future is in open banking “.
Furthermore, the fintech wave has brought with it an awareness that consumers once did not have “also because banks tend to hide costs and commissions”. The transparency banner that Revolut and its competitors fly, from N26 to Satispay to Transferwise, showed millions of consumers across Europe how much money they spent without even realizing it on services they thought were free.
“I worked as a trader – says Storonksy -. I was often traveling and at a certain point I began to calculate how much I was spending on commissions for transactions abroad: it was a lot of money every year. And the same happens for those who want to make investments: today to buy a stock listed on Wall Street you have to convert euros into dollars, then there is the commission for the purchase of the share and that for the sales and again the commission for the exchange rate from dollars to euros. Here, with Revolut all this comes close to zero. It takes time to create financial culture, but the competition we have brought to the market helps to clarify ”.