Member Spotlight: Revolut, Lessons Learned From Their AFSL Journey

Earlier this year, Revolut finally reached its goal in obtaining an Australian Financial Services Licence (“AFSL”). This is a goal that many fintechs are working towards with the journey presenting many hidden challenges.

For this week’s Member Spotlight, we spoke to Matt Baxby, Australian CEO of Revolut about their AFSL journey, the challenges they encountered and the things they learned along the way. We’ll also delve into what's next for Revolut and its customers.

The Beginning

Revolut was founded in London and launched in 2015 by co-founders Nik Storonsky and Vlad Yatsenko. Both founders spent years working for some of the biggest global banks, where they experienced first-hand the astronomical fees applied to foreign exchange transactions. After trying and failing to find a fairer way to exchange money, they decided to start Revolut in order to build something that transformed the finance industry from the ground up using technology, while saving people money.

Now Revolut has expanded its product offering to build a Financial SuperApp, which gives customers greater control of their financial health. The platform now integrates tools such as built-in budgeting & analytics, commission free stock trading with fractional shares, charity donations, cryptocurrency trading, and insurance.

Revolut is now the UK’s fastest growing private tech company and one of Europe’s largest fintechs, with over 12 million customers globally. Its long-term goal is to build the first  global bank – where consumers worldwide are serviced via the same app operating on a single technology platform.

With rapid growth comes unique challenges, “From trying to maintain the rate of our customer growth through to continuing to hire great talent across the business, the biggest challenges we have faced have been associated with our rapid growth,” says Mr Baxby. “For instance, Revolut has grown to over 2,000 employees globally in just 5 years, so we’ve had to adapt our culture as we grow. Revolut was also one of the first and largest fintechs to expand out of Europe into the US and the Asia-Pacific region, and we’ve learned a lot in navigating the associated regulatory hurdles that come with that.”

The Present

When asked what tips he has for other fintechs that are seeking an AFSL, Mr. Baxby says that there is no one-size-fits-all approach, and that each fintech will have their own unique point of view and set of circumstances. “The priority for Revolut in Australia was to beta test our product in this market. We were granted a temporary licence exemption which enabled us to use our UK e-money licence while our application for an AFSL was being considered. We knew from the outset that the grant of an AFSL would take some time, and the exemption allowed us to determine what features we’d need to build to meet the needs of our Australian users and build operational processes here in Australia.”

Revolut’s AFSL took approximately 9 months from application lodgment through to grant, noting that the process will always be a “moving target.” The speed of the process is often influenced by a combination of factors, such as the complexity and preparedness of the business, the quality of the documents provided and the number of applicants that ASIC has in its pipeline. Mr Baxby’s number one tip would be to invest in high quality submissions that comprehensively provide all the information that ASIC requests - the easier it is for them, the quicker the process will be. “The other piece of advice would be to maintain open lines of communication with the regulators - keep them informed about material developments in Australia and abroad.”

However, the most difficult part of the process was working against uncertain timeframes and managing both internal and external expectations. “Being a global fintech with an established presence in Europe meant there was understandably a lot of excitement around Revolut expanding to the Australian market, so it was crucial for us to communicate well with our users, partners and our support teams through the process.”

Matt Baxby, CEO of Revolut Australia

The Future

In terms of what is next for Revolut, the Mr. Baxby considers obtaining an AFSL to just be the beginning of their journey. “Securing an AFSL was a very important milestone for our team, but it’s really the starter’s gun for us, not the finish line. We’re building a Financial SuperApp in Australia that gives our customers the experience they deserve: one that brings them real dollar value, is designed to be easy to use, gives them greater transparency, and brings together all aspects of their financial life.”

“Whilst COVID-19 has certainly influenced our plans, we’re excited to be lifting our Australian waiting list soon and rapidly building out our offering where we see a real consumer need.  We are in the fortunate position of having a broad range of features that have worked so well in the UK and Europe, that we believe Australian users will love. This includes everything from smarter money management tools, being able to hold and trade different asset classes, rewarding our users with perks that are relevant to them and giving something back to the community.”