Today’s guest on the podcast is Ronald Oliveira, the U.S. CEO of challenger bank Revolut. Ron has a lot of experience in the traditional side of banking as he takes over the reins for the European fintech’s efforts stateside.
We discuss the challenges and opportunities of the US banking market. Ron describes the firm’s product rollout cycle for Revolut, which wants to be a global bank. We would be remiss if we didn’t chat about the fintech vs. incumbent bank scenario and Ron’s perspective is important given the two worlds he’s straddled.
About a year ago, Revolut came to the conclusion that they had moved well beyond being just a travel card. They had a solid core group of clients that wanted to make Revolut their bank and use it everyday for their transactions and in their lives. At that point, Revolut looked at its market and what it needed to do to accomplish that. Because when clients make you their primary bank, they have a lot more needs.
Revolut started to look for strong folks — from board appointments to US territory — with deep financial knowledge and experience to marry with one of the best financial technology companies in the world. We’re now rolling out products in Europe and in the U.S. over the coming months that speak to this.
The U.S. market
I’m not sure the US is significantly different than other markets. It’s at a different level when it comes to regulatory scrutiny and competition. Everyone has competition — my counterpart in Ireland struggles everyday to make sure we’re at the top of our game. You need deep experience to navigate the convoluted regulatory structure.
So, that slows the rollout process to a degree because we want to ensure that we’re in line with everything. It’s a privilege, not a right, to do financial business here — you have to earn your way through that. The market combines traditional, deep, long rooted organizations with a good cadre of upstarts.
One of Revolut’s absolute goals is trust. That’s what most fintech companies are struggling with — to ensure the public that their money is safe and everything is in order.
In late March, we went live with our partnership with Metropolitan Commercial Bank. We’ve been out in the market ever since. They’ve been a really good partner for us and ensure our clients’ deposits are FDIC insured. We’re going slow and careful regarding pursuing our own banking license eventually.
The product in the U.S.
We were in beta for some time to make sure the product worked well. What we rolled out in the U.S. is streamlined with our core product offering — the FX piece with 28 currencies you can carry in your wallet and other basic features. Now you’re seeing us bolt on a lot of new products to that.
For example, we just added Donations. We’re putting in the Junior program in relatively short order. A loyalty program will be coming out. We’re looking at small business. What you will see over the coming months is us adding those products, testing them, making sure they’re well-suited to the US market, and then moving on to the next product.
A global product
At our core, we’d like everything to be similar across countries. We want to be a global, all-in-one, financial app. That means, whatever country you’re in, it should look similar with the same features. It should look the same as a user. You’ll see a refresh of our app — which has been in the works for some time — in the coming months. It will slowly roll across our global footprint. The app will all look the same — how you enter it and navigate through it.
Acquiring new customers
Pre-COVID, we had a large rollout campaign planned. Performance marketing and advertising to get some name recognition and traction. Once COVID came, we took that off the table and we haven’t turned it back on.
We’re looking at a loyalty program — a perks program — to help entice new users. Beyond talking to folks like you to get our name out, we haven’t done very much. It’s been organic growth. Once things normalize, we’ll look at marketing again. Our name recognition is very low in the U.S. and we need to work on that. We won’t get to the marketshare we want to have unless we get more aggressive.
Challengers vs. incumbent banks
I have a different view on it. You hear about a revolution to fintech and how traditional banks will eventually shutter. I don’t go down that path. Having worked in the traditional world of banking and in tech, I think what we’re looking at is an evolutionary period taking place. Traditional banks are trying to move more towards mobile-app centricity, a little less traditional delivery of the product. You’ll see the evolution of the traditional delivery system blur together with fintechs, who also want to become mainstream.
Lines will blur between traditional and new upstarts in how the product is delivered. Traditional institutions struggle with legacy systems. That’s a tough way to pivot. It takes time. Community banks aren’t going away — they’re an important part of the fabric of our country.