Cashless.pl interview with Revolut Bank CEO Virgilijus Mirkės
Will fintechs come out badly battered from the pandemic?
The first wave of fintechs emerged after banks collapsed in 2008. Now, with the pandemic economic slowdown, we can expect another big wave of fintechs to arrive and those that are operating already on the market to get even stronger. Revolut growth in 2020, despite hardly any marketing spend and many cost cutting initiatives, was remarkable and we are on the right track to achieve profitability.
The pandemic is a threat to traditional financial institutions who pay for branches and offices that are not used during lockdown. We have just announced a global shift to permanent flexible working policy and we will optimise on our not many offices turning them into RevLabs. Our employees opted for freedom to choose whether they want to work from home or from the office. They treat the office rather as a meeting point for brainstorming, then individual work which they like to do from home. We follow our employees suggestions and global trends. With remote work so easy from a tech perspective, we are now targeting a global talent pool, no matter the place of living. We want to attract top global talents to Revolut.
Sometimes I read comments under our publications on Revolut and see that cashless.pl readers use Revolut services for traveling, on business trips or exchanging cash for cross-border transactions. For obvious reasons, they have stopped using the first two. How does this affect Revolut's business in Poland and in Europe?
Few years ago Revolut was in fact a travel card. Then, as more features were added it became a popular way for online shopping and subscriptions, mainly due to our disposable virtual cards. Then many customers in Poland started to use it for their daily payments, both online and offline, to better control their spending - we’ve seen it especially over last year. Now, as we are rolling-out Revolut Bank services in Poland - like deposit accounts protected under deposit guarantee scheme, consumer credits and credit cards - we want to attract another group of customers, interested in banking services. So our customer base in Poland has not only grown 50% since last year, but it is more and more diversified in terms of what people use Revolut for. And I have not mentioned yet our Business products and Revolut Junior features which are all hot services recently.
Is Poland still an important market for Revolut? It seems that your decision-making center for the region shifted to Lithuania? Weeks have passed since Karol Sadaj’s exit and his successor in Poland has not yet been seen.
We are on the hunt for a new General Manager for Poland, expecting a new Marketing Manager to join us in Q2, and see our Credit team in Warsaw also getting stronger with new hires of experienced managers from the Polish banking sector. Poland is definitely on the move and is a key market for three reasons. Revolut's biggest office in the world, except our HQ in London is located in Cracow. Secondly, Poland is among top five markets with a customer base exceeding 1M. Last but not least it is also the first big market we are rolling-out our Revolut Bank services to, this is happening right now.
Recently, Revolut informed Polish customers that they might lose their accounts with local IBAN numbers in March? Why is this happening and how big is the risk of this black scenario?
We announced a month ago that starting March 18 we will no longer be able to offer Polish IBAN numbers for upcoming transfers in PLN. We also informed our customers in Poland directly via emails and via our FB page that we are looking for a new partner to help us bring this functionality back in Poland. No official date when we will be able to announce local IBANs are back and running. So we advised our customers to switch to debit card top-ups and to check on the possible costs local Polish banks impose on sending transfers to LT number accounts that we offer now.
We are sorry for this inconvenience for our customers and are working hard to find a way to offer local Polish IBANs in the nearest future. Because our main goal is to become customers’ daily banking solution with as many tailored local services as possible. We’re building our own as well as banking partnerships-based capabilities to achieve this goal as fast as possible.
How will the loss of local IBANs impact the average user of the app and the card?
First we asked customers who are receiving their wages to Revolut to check if their employer can switch their salary to new number account starting with LT - this should be possible as IBAN discrimination is not legal in European Union, and in Polish law the alternative is payout in cash, which is usually not convenient for anyone. The other thing to check is if the employer’s bank will charge and how much for such a transfer. We have customers who receive their salary to Revolut so it is important for them. Then, if someone is topping-up a Revolut account with bank transfers, we advise to switch to card top-ups, preferably from debit cards, which are free.
Why, in your opinion, banks in Poland do not want to cooperate with Revolut and sell him this service? In the financial sector it is rumored that it is a matter of reputational risk, linked with KNF's recommendations on AML?
We are cooperating with different Polish banks on different services and it is excellent cooperation. We are talking with banks in Poland about Polish IBANs and hope these talks conclude in us being able to restore local IBANs for Polish customers.
Solving the problem, although logistically difficult and costly, would be to set up the Revolut Bank branch. Are there such plans?
It is definitely one of the possible options, but it is too early for us to comment further on this. For sure we will be talking first with regulators in Lithuania and in Poland, before announcing publicly any news about branching out in Poland.
Speaking of banking services, how will Revolut surprise its Polish customers this year?
Revolut Bank is entering the lending sector and we hope to bring better value banking products for Polish customers. Revolut is also entering global e-commerce with new payments and acquiring solutions for retail and business customers. We plan to offer a great business package for small and medium entrepreneurs who suffered a lot during the pandemic. The list is long in fact and goes on and on, so let me just say Revolut will bring a lot of upgrades to the features so many Polish customers love like spending analytics, group bill splitting, insurance, vaults, rewards, trading, cards for kids and many more.