Revolut is making some changes to its business practices and company culture as the company aims to move from a startup to a global bank.
According to a report in The Financial Times, Revolut is making changes — including adding a customer service phone number — as it seeks to become more than a challenger bank, which will require increased funding from investors. The bank has amassed 4.7 million customers in under four years in operations with 12,000 new account sign-ups daily. While it ended 2018 on a strong note, this year the company has been marred by scandals that could hurt its ambitions and are prompting changes.
The Financial Times reported since the start of 2019 Revolut has had problems with the Financial Conduct Authority in the U.K., the Advertising Standards Authority and the parliament in Lithuania. The company’s founder and CEO Nikolay Storonsky has also been accused this year of being a bully. “All these claims in the press are completely untrue,” he told The Financial Times during two and a half hours of briefings with Revolut’s senior leadership. “The reality is we have never done anything wrong.” He did note the rapid growth in the company has created “growing pains” but that as the company grows it’s changing its culture. While the executive defended his hard-charging style in the FT interview, he did acknowledge there were issues when the company was starting out. “We didn’t really have enough budget to hire a lot of great people in compliance,” he said.
Revolut now has a compliance team that is more than 200 people strong with plans to double the size of the compliance team over the course of the next year. It has also recently hired a head of learning and development, and in March it named Martin Gilbert, the co-chief executive of Standard Life Aberdeen, to be an adviser to Storonsky. The company, which is seeking a banking license in Lituhia, also sent a letter to Stasys Jakeliunas, the ruling Farmers and Greens Union lawmaker, apologizing for its actions. Revolut is also finding that it needs to improve its relationship with the traditional banks it is trying to disrupt. A lot of its customers use banks for things such as cross-border money transfers, and Revolut needs them when issuing prepaid debit cards in new areas.
Revolut has plans to expand into Australia, Singapore, Japan and Canada in addition to the U.S. and as a result may need to raise more money this year. It raised $250 million led by DST Globa a year ago, marking the longest period Revolut has gone through without raising capital. It is still losing money, although its revenue is growing. “Investors always want to invest. It is up to us to choose the right timing,” said Storonsky in the report. “For now we are fine. Maybe in the near future we will start fundraising.”