One of the biggest commodities now is data...just imagine the data they are harvesting
One of the biggest commodities now is data...just imagine the data they are harvesting
I am not sure that the banks make much if any profit on current accounts.
They do make it on FX transactions, so I suppose Revolut might affect them there a bit.
But they make most of their money on lending, and mortgages in particular.
Isn't Revolut hugely loss making? I don't know much about their business model, but it does not look sustainable to me.
Brendan
One of the biggest commodities now is data...just imagine the data they are harvesting
I am not sure that the banks make much if any profit on current accounts.
They do make it on FX transactions, so I suppose Revolut might affect them there a bit.
But they make most of their money on lending, and mortgages in particular.
Isn't Revolut hugely loss making? I don't know much about their business model, but it does not look sustainable to me.
Brendan
The large banks (I'm not thinking of BoI, AIB etc) are not threatened by services such as Revolut - they may have other concerns.
Revolut and N26 (if they don't collapse in the meantime) will put in place their own banking infrastructure eventually. Regulators and investors will insist upon it if they get big enough.
I do note that Deutsche got slapped on the wrists for the amount of payments that failed in the CHAPS system recently.I think you misunderstand what I meant (or I wasn't clear) - yes they will have their own infrastructure / platforms. But they won't have their own global payments infrastructure - they will sit on what's available. As do most banks and financial institutions. Whether it's SWIFT, Fedwire, ACH or various other core infrastructure, they will plug into them. Even the replacements to these are not owned by the start ups, they are funded by the large processing banks & institutions - JPM, Citi, BofA, Visa, etc - whether individually or in consortiums. Think of them as large global utilities. The likes of Revolut will plug into these and look to eventually be profitable by having enough customers that internal switches (from one Revolut customer to another) allow them reduce cost to service.
Revolut and N26 will never (well - for the foreseeable future) be of a scale where they could think about funding a global payments infrastructure and then persuade other participants to use it (which they would need).
An analogy (though somewhat poor) is a mobile service reseller. They can sell you a service and buy wholesale from the utility providers. But there is no way they would have the scale to build their own masts, buy their own bandwidth and run their own tech infrastructure and have a comparable service. The investment scale required in international payments is much wider than that
Once I'm confident these guys are here to stay I will be very happy to move away from traditional banking. I've one child who had endless trouble trying to open a normal bank account in the UK and gave up and opened a Monzo account. And now I'm by passing my banks, Ireland and abroad to use Transferwise to do my currency transactions. I can transfer money in less than an hour from one country to another. It's unbelievably amazing. I was shocked. When I do bank to bank transfers Ireland/abroad it takes a couple of days. Which I though could not be avoided.Revolut (and to a lesser extent N26 and others) are proving serious competition for the incumbents in terms of payments, FX and increasingly in the current account sphere.
Well done Revolut for such impressive growth and helping break the hold, of the traditional banks, on the Irish banking market.
Once I'm confident these guys are here to stay I will be very happy to move away from traditional banking. I've one child who had endless trouble trying to open a normal bank account in the UK and gave up and opened a Monzo account. And now I'm by passing my banks, Ireland and abroad to use Transferwise to do my currency transactions. I can transfer money in less than an hour from one country to another. It's unbelievably amazing. I was shocked. When I do bank to bank transfers Ireland/abroad it takes a couple of days. Which I though could not be avoided.
Also I'm not impressed with my last outings into bank branches of two of the main Irish banks. Young people dressed like they were down the disco, no privacy, and zero customer service attitude. In fact the attitude was why are you bothering me. And the bank branches look like I was in somwhere like McDonalds, only no bad smell.
I use N26 and Revolut. I feel somewhat more secure with N26 because it is an actual bank, atho I understand Revolut lodges money with Barclays and therefore benefits (or the customer benefits) from UK gov.t guarantees.
I'd imagine that not having their own infrastructure and being able to plug in to existing infrastructure is what gives them their advantage. They come to the industry with a clean sheet whereas the systems of incumbent banks are almost falling over - caught up with endless compliance. They can't update their systems as they're unwieldy.But they won't have their own global payments infrastructure - they will sit on what's available. As do most banks and financial institutions. Whether it's SWIFT, Fedwire, ACH or various other core infrastructure, they will plug into them. Even the replacements to these are not owned by the start ups, they are funded by the large processing banks & institutions - JPM, Citi, BofA, Visa, etc - whether individually or in consortiums.
Often the lack of competition in the Irish banking market is discussed.
In that content, I think Revolut reaching 500,000 Irish customers, should be celebrated.
Traditional common perception of the Irish banking market: Current account competition is non-existent, banking is a closed market and banking inertia is huge.
Revolut are proving that this perception is no longer reality.
Revolut (and to a lesser extent N26 and others) are proving serious competition for the incumbents in terms of payments, FX and increasingly in the current account sphere.
Well done Revolut for such impressive growth and helping break the hold, of the traditional banks, on the Irish banking market.
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