More Money, More Problems (for Revolut's competitors)

Revolut has completed its latest financing round, raising approximately £387 million from a group of investors led by the US fund Technology Crossover Ventures. The UK based fintech firm is now valued at £4.2bn - triple its previous valuation of £1.3bn in 2018.

Revolut’s intention is to use the funds to expand its banking operations across Europe. This means Revolut users could in the future have an alternative method of accessing credit products, which typically would have been offered by brick and mortar banks. 

It will be interesting to see whether Revolut will go beyond offering retail and business loans. Issuing credit cards may be one product that they explore to compliment the pre-paid cards that they currently provide. The expansion of Revolut’s products to loans and credit cards may result in Revolut users moving away from traditional banks altogether for their day-to-day banking needs.

However, while many consumers are embracing challenger banks, there is still a place for brick and mortar banks. Many consumers want the ability to enter their bank’s local branch and have face-to-face interactions with representatives of the financial institutions that they entrust to safeguard their money. Those consumers do not want to discuss their finances through an online chat or over the phone. The ability to talk face-to-face and resolve any issues or questions in person is still desired by many, particularly when it relates to mortgages and large loans.

Time will tell whether Revolut can successfully take the next step into the banking world. One thing is for certain though, increased competition in this space can only be a good thing for consumers.