Grown-up Fintechs have done very little in transforming banking culture


Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019.

We live in a world that has increased its expectations from the corporate sector in terms of their social responsibility now and going forward. We monitor closer and expect much more from leaders in `large` companies. The items that have moved up to our top ten `social responsibility` items, now include

  • How management treats employees in these tough business conditions?
  • What actually matters as much or more than profit, to the business now that things got tough?
  • Who is innovative in a way that solves the current unusual circumstances?

The list, of course, is much longer, but in a nutshell, it is all about caring, ethics, values, and what matters. So, I cannot stop from asking the question `Have grown-up Fintechs lived up to the current circumstances and if not, what can we learn from these failures?`

I must admit that this is probably the first time I am writing a post from a pure negative point of view or better said from being disappointed. I will explain the reasons I am disappointed with two Fintech unicorns, and while I share my point of view, I invite you to consider how this can be mitigated going forward and also rethink whether this kind of innovation is what we need and what we asked for, or have we de-railed from the original intention. Fintech innovation was and is all about democratization, financial inclusion, customer centricity, disintermediation, ect.

Revolut is one of the top unicorns in the digital banking sector. I am a client (as an individual, not my business). I chose to add Revolut to the other dozen (not kidding) financial providers I have (some more active than others) because I travel in Europe which means already three currencies (CH my residency, Euro for all EU countries, GBP for London) and I often make payments in USD for various reasons. The user interface is superb. The seamlessness of exchanging one currency to another is yummy. Revolut has spoilt me in that respect and whenever I do an FX transaction with another financial entity, I feel I am back in the stone ages.

And now that I am spoilt and Revolut has grown up (5yrs old in July) I can also voice my disappointment. As Lauren Nizri, founder of the Paris Fintech Forum, said on his on stage interview of Nik Storonsky, CEO Revolut, at the Feb 2020 forum ` I don’t have a crystal ball to tell which is the next Revolut, and I surely didn’t know that Revolut would become the unicorn it became back when Revolut was at the Paris Fintech Forum 2016 somewhere in a secondary stage hidden`.

To date, Revolut has been generously funded with just over $900million, and let’s not forget that the $500million (Series D) was just closed in February 2020. What a timing, in retrospect! This tripled its valuation that was already in the unicorn club and reached $5.5 billion from $1.7 billion.

This mega funding is for Revoluts global expansion. The company`s decision to reduce staff is a business decision that was not well communicated at all. A high growth company with a mega-round recent funding, reduces staff only if its business expansion is being revisited and slowed down. My expectation of Revolut, is to hear directly from the digital native CEO a communication that is of the current era. David Brear and the 11FS team, did it the right way with this blog post and a live session and a very empathetic Twitter sharing from him and other members of the team (Leda Glyptis being one of the leading ones).

Town hall 17th June 2020: Business update from David • Blog • 11:FS 

The 11FS way of course is not the only way. On top of it, Revolut should have been much more emotionally intelligent regarding its staff and its public image. Back in 2019 already there were damaging reports about unpaid workers, a toxic workplace with unachievable targets, and high-staff turnover.

Revolut insiders reveal the human cost of a fintech unicorn’s wild rise via WIRED

There have been multiple media articles around the toxic workplace at Revolut. This is not a recent issue that was badly managed during the crisis, it actually is over one year old and there has been plenty of time to show actions to fix it.

My disappointment with Revolut is mainly a cultural one. A digital-only bank with over 1,000 employees now does not deserve a differentiation from incumbents as a lean organization. A digital-only bank whose working culture is more or less “Get Sh*t Done” and whose cost savings Human resources strategy is widely criticized, requires `getting their act together` and demonstrating how their share the value creation of the company with their workers and how they are innovating in delivering the digital-only experience.

Eight execs leave Revolut as virus fallout tests culture – Financial News  via @FinancialNews

Revolut staff claim they’ve been told to quit their jobs or be fired WIRED

It is not enough anymore to provide us (retail or business clients) with a slick interface, an efficient experience (faster and cheaper) when transacting.

Digital banking has to have many more points of differentiation from traditional banking.

It has to be also cultural and organizational.

If the innovation of a grown-up Fintech stops at the online experience level, then I must say that nowadays I expect more. I expect from a unicorn with a $5billion valuation, transparency, emotional intelligence in the way the organization is managed and a focus on original values. Much like we are shifting to consuming products that are bio or ethical grown, we need fintech companies that are raw models of how sustainable, resilient, and good businesses are run. Your products and services are better than the ones before, but as your technology is not the secret sauce, we want to be customers of a corporation that is better than the ones before.

Revolut needs additional emotional intelligence training, to explain to us all their decision to introduce a paying service for FX transactions above certain limits. I am perfectly fine with the introduction of new, additional services that are paying but I am not fine with the introduction of FX fees when the core narrative of Revolut was free FX. It is as if, God forbid, Robinhood introduces next week fees for stock trading orders above a certain size.

Revolut has a serious cultural problem that has not changed.

Revolut admits fabricating stats for Spotify spoof ad following FCA referral  via @thedrum

If we are apathetic to all this, then we only care about our own convenience and let’s stop talking about the Black sheep of Wall Street, the evil banking incumbents, financial inclusion and democratization. Let’s call it by its name – only CONVENIENCE matters.

Ask yourself if you care that a 5yr old well funded `innovative` brand:

– Is no different from the incumbents, when it comes to compliance and the army of employees needed

– Nurtures a toxic working environment for its employees and shows no empathy, in the name of growth

– Reduces freemium services to keep their VC investors calm

– Is not innovative by any stretch of the imagination, in the way it runs its organization

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