UK-based fintech giant Revolut is getting ready to launch its private banking division in another big push to cater to its high net worth clients. The move signals yet another transformational phase in the evolution of the company that started as a fintech app focused on digital banking.
Sources indicate Revolut has been granted permission from the country’s regulatory authorities to operate a much wider range of financial products, which include leveraged investments, wealth management solutions, and portfolio management services.
By obtaining clearance from the Financial Conduct Authority (FCA), Revolut becomes a direct competitor to existing private banking establishments.
Revolut Expanding Services
Revolut became a true fintech phenomenon during the last couple of years. Initially a travel payment application, the firm is currently one of the most valuable fintech organizations across Europe, offering banking, cryptocurrency exchange services, stocks trading and wealth management options, and a range of business-related financial solutions.
With its entry into private banking, Revolut joins other fintech firms trying to attract wealthier clientele by offering more complex financial instruments and investment solutions.
This initiative can help increase revenues from high-income consumers and make them stay loyal to the brand.
Wealth Management: New Battlefront of the Fintech Industry
Private banking has become an attractive area of operations for many fintech organizations. Increasing digitalization of financial products and services by the more affluent parts of the market have opened up significant new opportunities for fintech players.
In the eyes of analysts, the technology platform and massive client base provide Revolut with a competitive advantage. But in any case, the company will need to overcome the fierce competition from legacy private banks and emerging fintech solutions.
In a secondary share sale, Revolut’s valuation was estimated at around $75 billion last year, illustrating the growing interest of institutional investors in the long-term strategy of the fintech giant.
Private Banking Authorization From FCA
Approval by the FCA reportedly allows Revolut to enter into such segments as:
- Portfolio management
- Private wealth management
- Leveraged financial services
- Investment solutions
All those options may contribute to developing the ecosystem of premium fintech products offered by the company to its rich clients residing in the UK and possibly even other countries.
Fintech Landscape Undergoes Rapid Changes
The Revolut’s recent news illustrates the fast evolution and expanding scope of activities of fintech companies. Currently, firms operating in the fintech space aim at high-value-added segments such as wealth management, lending, investments, and insurance.
As competition continues to increase in the sector, fintech firms try to focus on the convenience of use, low commission rates, and the ability to build a financial ecosystem for their premium customers.
Revolut’s move into private banking shows how financial technology companies are expanding beyond basic digital banking into more advanced investment and wealth management services.