- Revolut’s Australian launch coincides with collapsing consumer confidence in traditional banks
- Low transaction fees attract new customers to Revolut, especially Millennials
- Social media communities of loyal users evangelise Revolut’s merits
The fast-rising fintech challenger bank Revolut has been in Melbourne sharing the secrets of its meteoric rise at the three-day ‘Intersekt’ fintech event ahead of its launch in the country.
Building consumer trust with ultra-low (ultimately zero) fees, technology-driven innovation and the creation of online social media communities of loyal customers.
For people wishing to transfer money internationally, Revolut has been a boon. Founded just three years ago, the London-headquartered neobank boasts 3 million customers in Europe and is on course to launch in Australia within a matter of months. By the close of 2019, it aims to have 150,000 Australian users on its books.
Revolut’s Chief Marketing Officer, Chad West, was in Melbourne for the annual ‘Intersekt’ festival, along with over 500 other fintech aficionados, and shared insights on the extraordinary rise of neobanks like Revolut.
The Australian banking sector has recently emerged from a banking royal commission investigation with its reputation tarnished and its consumer confidence seriously undermined, with especially severe criticism being directed at excessively high fees for businesses and consumers who need to transfer money internationally.
West’s low-fee message for the mainstream banks is frankly ominous. Last week’s Deloitte Trust Index for banking highlighted what an Olympian effort they have to make if they are to regain consumer trust – at a time when agile, innovative challenger banks like Revolut are successfully attracting millions of new customers, especially Millennials, who have flocked to the new platform.
This new willingness to try out the fintech sector is corroborated by the EY Fintech Australia census 2018 released last week at the Intersekt event, which reveals that since 2015, fintech adoption has more than doubled. 37% of people are now using at least one fintech business to receive financial services.
West explained that Revolut had fostered trust among its users by “cutting fees back to the bone”, a quick money transfer comparison will bear this out, beginning with foreign exchange rates. It outdoes many money exchange brokers by offering the same FX rates as banks in wholesale markets.
This is tough news for the banks to swallow. Their fees will remain under pressure in Australia following the royal commission, but the rocketing success of challengers like Revolut may mean they will have to embark on a root-and-branch rethink of how they charge fees if they are ever to regain the trust that they’ve lost.
Along with another fintech challenger bank at the Intersekt event, Afterpay, the rising fintech stars are not only slashing transaction fees but they’re also cannily harvesting the fruits of social media platforms, encouraging the formation of communities of devout users who evangelise on their behalf about the benefits on offer.
Melisande Waterford, General Manager of Licensing at the Australian Prudential Regulatory Authority (APRA), told the Intersekt attendees that her organisation is currently receiving one new application for licensing with every passing week.
Revolut is on course to join the ranks of other fintech stars opening up business in Australia, including Archa, QPay, Volt, Xinja, and Pelikin and Up, all of which are at the point of receiving authorisation to take deposits. If you want to transfer money abroad in Oz, the choices are getting broader by the day.
If you’ve enjoyed reading about Revolut, you may like our recent article here.
