Revolut, the fintech company, is currently looking into the prospect of monetising its customer data by granting access to advertising partners. It is envisaged that this initiative may prove a lucrative source of income for the company, given that its bid for a UK banking licence is presently at a standstill. The London-based organisation’s head of growth, Antoine Le Nel, proposed in an interview with the Financial Times that it could be a proficient medium for targeted advertising, producing a significant percentage of its overall revenue.
Revolut is privy to numerous user habits and preferences due to customer interaction within the app, as explained by the fintech executive. Inam Mahmood, the former head of ecommerce partnerships at TikTok UK, has been appointed to steer a sales team of 30, focusing on Revolut’s new media-driven direction. The company is quietly aiming at achieving £300 million in revenue from advertising by 2026, notwithstanding such claims were not commented on by Revolut.
By the end of 2022, Revolut’s total revenues stood at £923 million. Revolut’s attempt to penetrate the advertising sector comes amidst dwindling interest from investors, a situation compounded by the stagnation of its application for a banking licence in the UK. Its services to Irish customers, which include personal loans and guaranteed bank accounts, are currently sustained by a full banking licence held from the European Central Bank (ECB).
In 2021, Revolut clinched a $33bn valuation following a funding exercise steered by SoftBank. However, several investors, including Molten Ventures and Schroders, scaled back their approximate internal valuations for the young firm. Schroders valued Revolut at a reduced $18bn by the end of 2022, before revising it up to $26bn at the close of 2023. Following a pre-tax loss of £25 million for 2022, Revolut has the challenge of convincing investors of its potential for sustainable profitability, a year on from a £40mn pre-tax profit, largely fuelled by a surge in cryptocurrency trading.
Rupak Ghose, an expert in financial technology and past financial researcher at Credit Suisse, opined that despite continuous growth, Revolut is seldom used as a primary banking source. He suggested that to establish a substantial and lasting revenue flow, it needs to venture into lending. He stated that real earnings from peripheral income streams, much like Amazon.com’s approach to ad revenues, need heavy daily customer interaction. He also highlighted that the ‘superapp’ approach in banking has seen limited success globally, with China being an exception.
More than three years have passed since the London-centric fintech made an application for a UK banking licence. It’s important to note the usual time frame for its awarding is approximately a year, as per UK regulatory directives. Obtaining a licence is vital for Revolut to broaden its lending services domestically and enhance its profitability.
Mr Le Nel pointed out that both advertisers and distributors have expressed early interest in collaborating with the fintech company. Revolut is currently conducting internal trials for customised advertising and is discussing finalising ad space on its platform for brands. Mr Le Nel expects increasing engagement with Revolut to bolster interest in this partnership. He stressed the importance of embedding Revolut into users’ daily routine, mentioning, “We wish for Revolut to become part of everyday rituals, similar to checking Instagram or emails.”
The company has also made proactive moves to branch out from traditional banking, debuting a mobile e-SIM earlier this year. This allows customers to access mobile data during travel. Other revenue streams for Revolut include payments, subscriptions, forex, and its wealth segment which features cryptocurrency trading, as revealed by its recent annual report.
Copyright The Financial Times Limited 2024.