How has the fintech sector developed and changed in the last six years since you started at Revolut?
The fintech industry has seen significant changes over the past six years, driven by technological advancements, changes in consumer behavior, and regulatory developments. Some of the major changes: widespread adoption of mobile banking and instant payments; blockchain technology that gained popularity in the fintech industry with many companies developing solutions that use the technology for secure transactions; open banking that enables the creation of new financial products and services that leverage the third-party data; increased usage of artificial intelligence and machine learning in the industry for process automation and services personalisation; developed digital identity verification tools; many regulatory changes that support fintech innovation and protect consumers.
Talking about us, we are moving towards a financial super app, not only providing a digital wallet. Users of our app can manage daily finances with our advanced budgeting and analytics tools, use lifestyle and travel products, such as book a stay abroad in a private apartment, invest in stocks, commodities or cryptocurrencies, and also chat with each other within our instant messaging app, send money to kids through Revolut ＜18. We are constantly expanding the product portfolio across the markets and industries, i.e. we focus a lot on new services for the travel and tourism industry.
What are your expectations for 2023 and beyond? What can we expect from the sector? How do you think it will develop and do you expect new companies to increase competition?
The industry will continue to develop due to the expansion of open banking, adoption of decentralized finance, the greater use of artificial intelligence and machine learning, etc. As the fintech industry continues to grow and innovate, regulatory bodies will introduce new laws and regulations to protect consumers and ensure that financial services are provided in a safe and secure manner. As for us, despite challenges in the tech industry and many layoffs in the leading global companies, our position remains strong - we are not only profitable, continuously growing, but also expanding to new markets, and we keep hiring more talent. Therefore we remain cautiously positive for the remainder of 2023 and beyond.
How do you define Revolut's place in the fintech market?
As a fintech company we innovate and build our own proprietary technologies that allow us to offer better transactions' processing than many legacy banks offer. People expect transactions to be instant, affordable and easy and we try to meet these expectations. But we are no longer disrupting only the payment industry: our app brings people a seamless experience when dealing with daily finances (budgeting, analytics, having an account for children), but also for traveling and lifestyle (currency exchange, accommodation booking, safe shopping with a cashback), investment tools (US listed stocks, cryptocurrencies, commodities), in some markets we started to offer credit.
Which companies do you define as your main competitors?
We don't view competition as our main focus. Our primary objective is building the best product that our customers love.
According to the latest information, Revolut users number more than 27 million people. How many do you anticipate by the end of 2023?
We currently have more than 28 million users - many people sign up for our services every day globally and we continue to grow fast. Our upcoming global plans include launches in Brazil and India, and we are continuing to expand and diversify our offer in the US and Japan.
In Bulgaria your clients top half a million. How do you rate our country as a market? What are the company's plans for its development here?
Currently in Bulgaria we have 550,000 users and are continuously growing. Most of the users are from Sofia, making it the 8th city in top 10 cities in terms of customers and with a 35% adoption rate among the working-age population.
Bulgaria, rather like other markets in the CEE region, has a similar user profile: young, 25-34 age group, more men than women, mostly living in bigger cities, high mobility (travelling a lot or working abroad). Our app is more and more popular among the more experienced age segments (35-54). Most of them tested our super-app during the COVID-19 pandemics and now they are discovering the convenience of our product especially when they travel, locally or abroad. Many Revolut customers are active travelers and use our app and card while visiting Bulgaria during the summer season. They also use our Stays and Homes in app feature to book hotels and private apartments in Bulgaria. We plan to add more travel services to the app, we look at car booking and much more.
The CEE region is important to us due to many factors: people are more mobile (work abroad or/and travel a lot), keen on using digital technologies, and use less cash. We are growing in the region mostly organically; people love our brand and product and use it more and more often. We already have more than 8 million Revolut customers in CEE and are growing fast. Having a full banking license in Europe, we started offering credit products such as consumer loans, credit cards, buy now pay later, and interest bearing saving products in first European countries. This is work in progress. As for Bulgaria, we are focusing on consolidating our market position and increasing awareness of our core products and features.
During the past year, you doubled your number of employees despite the general trend of layoffs in the technology sector. Do you foresee a reduction or increase in staff by the end of this year? Is this increase due, at least in part, to insourcing positions from your existing outsourcing partners?
Currently our team has more than 6,000 people globally and we keep growing and this is not related to insourcing positions in any way.
What new services can your customers expect in the coming months?We usually enter the market with bank accounts, debit cards and instant money transfers, currency exchange services and later on introduce more products, such as vaults, credit, investment or lifestyle products, including non-financial services such as holiday accommodation booking or instant messaging app, but this is a step by step process.
We started offering credit products such as consumer loans, credit cards, buy now pay later, and interest bearing saving products in first European countries and will continue expansion here. As for the future plans, we will also improve our investment offering with extra services, and will be launching joint accounts for couples and families. We are also launching car insurance in Ireland and we will improve our travel offering globally.
Recently, Revolut announced 2021 as its first full year of profit. Will 2022 repeat this result? How would you comment on the fact that the auditor BDO expressed doubts about the way the company's income is reported?
We are self-sustainable: we are well capitalized and as of FY2021 we have also been profitable. In 2021 we generated £26.3m in net profit, marking Revolut's first full year of profitability. Revolut's total revenue for 2021, as set out in our annual report, was confirmed by our auditors as accurate and not subject to the qualified opinion. Our auditor's opinion means that they did not have 100% assurance under audit standards to confirm without a doubt how much was attributable to certain revenue streams (Subscription, Card Delivery, Foreign Exchange, and Wealth services), but our total revenue and balance sheet was not in question. The limitations were remedied in 2021. We do not foresee that our FY22 accounts will reflect this limitation again.