How fintech giant Revolut is riding migrant wave

Almost one in three users of Revolut in Australia are migrants and many arrive as users of the fintech, which it says is helping it to grow its local presence at the expense of incumbents.

Revolut chief executive Matt Baxby.

Australia’s migrant wave has boosted the local fortunes of British fintech Revolut, as cashed-up tech-savvy arrivals come already furnished with accounts.

Revolut, the world’s most valuable fintech, is pushing for new business in Australia, a bank licence and an expanded market presence.

Revolut chief executive Matt Baxby said his company was riding a wave of new business from offshore after launching in Australia in 2020.

Australia reported a 352,060 migrant surge between January and August this year, marking a near record population boost in the highest number of arrivals since 2008.

Mr Baxby said many of these arrivals were coming armed with a Revolut account, and said there had been almost 500,000 sign-ups in Australia now.

Almost one third of Revolut’s Australian users were immigrants, according to the company’s data.

He said sign-ups on the platforms were surging, up 150 per cent in year-on-year growth.

“The thing that got us going was borders opening,” Mr Baxby said.

“We’re seeing higher and higher proportions of people using the product internationally and then using it domestically.”

Mr Baxby said Revolut had previously relied on organic growth for its Australian venture but a key component of recent customer growth had been people familiar with the brand.

“Take the Irish market; two thirds of the adult market holds a Revolut product,” Mr Baxby said.

Revolut has been expanding its products in Australia since its 2020 launch.

The company secured its Australian Credit Licence in 2022, and launched a business lending product in May this year.

Mr Baxby said the current banking system was leaving many customers “fairly under-served”.

Revolut is also chipping away at securing an Australian Banking Licence from the prudential regulator.

Currently Revolut relies on its institutional banking arrangements with heavyweight ANZ.

But Mr Baxby said Revolut wanted its own ADI in a bid to start offering insured interest-bearing savings accounts in its own right.

“We aspire to be our own bank in Australia; the approach we took when we came to Australia was to be a master of our own destiny,” he said.

The Australian Prudential Regulation Authority oversees the awarding of banking licences, and many recent entrants to the market under the much-hyped neobank model have failed to grab market share.

Neobanks Xinja, Volt and 86400 have all either failed or been bought by larger incumbents.

While Judo, the only survivor from the early rush of neobanks, faces questions over its market valuation amid rising funding costs.

Mr Baxby said APRA’s rate standards were “robust”, noting he was confident Revolut’s Australian customers were keen for full-service banking products.

“We’re really confident about the product market fit,” he said.

“Unit economics are stacking up, that’s a great jump-off point to becoming a bank in the future.”

But Mr Baxby said Revolut was not interested in competing in the home lending market.

“Mortgages are something we’re actively looking at in the UK and Europe,” he said.

“For our target segments it’s not an immediate priority.”

Revolut has not been immune to the rise of banking scams that proliferated in recent years, and the company said it was rolling out new financial crime technology across its business.

But Revolut has also faced questions over its accounts, and the company is pushing for a banking licence in the UK.

The fintech applied for its UK banking licence in 2021, but IT systems issues and delayed audit reports concerning annual accounts, after BDO raised concerns about revenue reporting, have dragged on the business.

Originally published as How fintech giant Revolut is riding migrant wave