Revolut: UK digital bank targets 10 million customers by 2020

Yet to turn a profit, Revolut's chief executive is confident in bringing new customers away from traditional banks

Revolut customers can spend money abroad in more than 130 currencies without paying a fee (iStock)

Digital bank Revolut has signed up a million customers across Europe since its launch in 2015 and is now targeting 10 million by 2020, its chief executive told Reuters.

Revolut, based in the Canary Wharf financial district at the core of the industry it aims to disrupt, is among a clutch of fintech start-ups challenging traditional banks by offering financial services customers can use entirely from their smartphones.

The business is adding between 3,000 and 3,500 new users a day, up 50 per cent from three months ago, its founder and boss Nikolay Storonsky told Reuters.

Those numbers eclipse Berlin-based rival N26, which has told Reuters it was signing up between 1,500 and 2,000 customers a day and aiming for 1.5 million within the next two years.

Like N26, Revolut has yet to turn a profit. Mr Storonsky says this is because of its reinvestment in growth, with plans to launch in North America and in Asia early next year, but he did not indicate when he expects the business to become profitable.

Revolut has about 600,000 active users a month without the company spending a penny on marketing, Mr Storonsky said.

Services that have contributed to Revolut’s increasing popularity include the fee-free international ability to spend money abroad in more than 130 currencies without paying a fee, as well as free international money transfers.

The company earns its revenue from commission paid by merchants and from add-ons such as insurance, which is provided by third parties through the app.

Next in its sights, Mr Storonsky said, are lucrative activities such as lending and wealth management after applying for a European banking licence, which it hopes to get in the first half of next year.

The Revolut banking app has processed more than 42 million transactions to date, totalling $6.1bn (£4.5bn), and Mr Storonsky says it has helped users to save more than £120m in fees.

“For every 500 euros people spend, they save 30 euros with us,” he said.

Reuters