Revolut founder Nik Storonsky says banks are poorly suited to building products, with only about 30 percent of staff working as producers.
Storonsky says Revolut takes two to three months from idea to production, while traditional bank management takes few risks despite very high pay.
Storonsky says Revolut is not yet profitable and that profitability depends on volume, while its growth has come mainly from word of mouth.
Revolut's founder says banks cannot build products and explains how his team does
Revolut's founder argues that banks fail at products because most staff are not builders and management is paid well to avoid risk. Revolut treats banking as a product instead. Small teams, in-house systems, automated compliance and a free core offer let it ship in months and grow by word of mouth, though it is not yet profitable.
Takeaways
Banks are structurally poor at building products. Storonsky left banking after the financial crisis. He says only about 30 percent of bank staff are producers, banks lack engineers and designers, and managers have the wrong skills. He argues banking should be treated as a product, not an organisation.
Revolut wins by giving a strong product free. Storonsky says Revolut's secret is an excellent product offered for free, with a premium plan on top. Growth has come mainly from word of mouth, and two crowdfunding rounds drew on people willing to sell it to friends and family.
Small teams and fast cycles drive speed. Teams have five or six people. New features are tested first with one team or about 1000 users, and the roadmap is reset every six months. Idea to production takes two to three months, against the slow pace of traditional banks.
Automation and in-house systems keep costs and delays down. Revolut builds onboarding, banking and payment systems in-house and automates compliance with transaction-monitoring and anti-fraud models. It uses partner banks and large brokers where speed matters, such as trading access.
Traditional bank management is slow and risk-averse. Storonsky says bank management teams earn very high pay yet take few risks. Asked what he would do running Norway's largest bank, he says he would change its culture and processes.
Fintech's next steps are open banking and AI advice. He welcomes open banking APIs that let startups use bank account functions. He expects the next steps to connect bank and broker accounts and add AI-based advice and analytics.
Revolut is not yet profitable. Asked about profitability, Storonsky says the company is not yet profitable and that profitability depends on volume. He adds that his trading skills transfer poorly to running a startup.
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