Revolut buoyed by banking ‘turbulence’

London-based fintech Revolut is drawing on an offshore licence to kick off its Australian operations.

Revolut’s Australian director says Australians have been underserved in banking for too long.

London-based fintech Revolut is drawing on an offshore licence to kick off its Australian operations as it seeks to take advantage of “a lot of turbulence” in the local banking market.

The four-year-old company — which has more than five million customers across Europe and a valuation of $US1.7 billion ($2.4bn) — will launch today in Australia.

Revolut Australian director Will Mahon-Heap said that while the group would initially rely on its British e-money licence, it was applying for an Australian financial services licence.

“There has been a lot of turbulence here,” he said of the post-Hayne royal commission land­scape, which was one of the attractions of Australia.

“Ultimately our advantage is our speed and our technology.”

Banks have been in the firing line after last year’s royal commission for their underhanded treatment of customers and scandals including charging fees where no service was provided.

“The most important focus for us is to take a measured approach. We are initially launching in Australia with a market-leading product in the areas of foreign exchange and money management,” Mr Mahon-Heap said.

The company — whose services include transaction accounts, payments, foreign exchange and overseas funds transfers and budgeting tools — will roll out more products in Australia over 12 to 18 months. It says it has more than 20,000 Australians already on its waiting list.

“Australians have been financially underserved for far too long. When it comes to spending and sending money overseas, you should not be forced into paying endless hidden fees,” Mr Mahon-Heap said. “It is an incredibly ­expensive thing to transfer money from Australia.”

His comments come after the World Bank labelled Australia the third most expensive market among the Group of 20 economies for customers and small businesses to transfer money.

Revolut attracted scrutiny in Britain this year when complaints were made to the ­Financial Conduct Authority about the validity of some of its ­advertising.

It has a headstart on local fintechs and digital banks that are also seeking to chip away at the market share of the incumbents.

Asked about the dominance of the big four banks in Australia and their ability to sideline fintechs, Mr Mahon-Heap said: “It’s only a good thing if banks start upping their game.”

Revolut is not providing any targets on the number of Australian customers it wants to attract over the next 18 months.

Mr Mahon-Heap said customer security was a priority. “We give as much security to our customers as possible,” he said.

Other players operating in the payments, foreign exchange and money transfer market locally, ­besides the big banks, include ASX-listed OFX, TransferWise and XE.

Revolut’s app for Australia will allow customers to hold and ­exchange 15 currencies directly.

The company will be based in Melbourne and the initial plan is to hire up to 30 staff.

Revolut is backed by venture capital firms such as Index Ventures, Balderton Capital and DST Global. The company was founded by former Credit Suisse trader Nik Storonsky and former Deutsche Bank systems engineer Vlad Yatsenko.