Banking Without Borders
00:07:03 · Jonny Pease
[00:07:03] S0: So according to Nikolay, some customers do store millions with Revolut. And these deposits aren't just valuable because of the wealthy clients themselves, but because they give Revolut the liquidity to expand its lending business at scale. Because the more deposits Revolut holds, the more they can lend. And this is where the real opportunity lies, not just in personal lending or mortgages, but in business lending and corporate finance. And this is where I think Revolut could really scale. In 2024, HSBC's Commercial Banking division, which handles business loans, corporate finance, and international trade, brought in $11,900,000,000 in profit before tax. And that's not just big corporations. HSBC lends to everyone from mom and pop stores to multinationals. And right now, Revolut does have business accounts, but they're mostly for payments and expense management. They don't offer business loans or overdrafts, which means they are missing out on one of the most profitable parts of banking. But that might be about to change. Because they've announced plans to launch business credit products in Europe. And this could be huge. Because by entering the business lending market, Revolut are positioning themselves to capitalize on an industry that's expected to grow from $17,600,000,000,000 to 47.2 by 2031. So for Revolut, even a fraction of this market could be transformative. But is this enough to get them to a $100,000,000,000? Well, it's certainly a step in the right direction. But Revolut is still missing one major piece of the puzzle because traditional banks don't just make money by lending it out. They make money by moving it, investing it, and controlling it at scale. Take HSBC's Global Banking and Markets division. In 2024, they made $7,100,000,000 in profit before tax. And this is where real money moves. So I'm talking investment banking, corporate finance, and raising billions for huge deals. So think Elon Musk buying Twitter. But how does Revolut fit into this? Well, they've already made some moves. We mentioned RevolutX earlier, they have stocks and commodities trading for customers. But retail trading alone won't get them to a $100,000,000,000. Because while apps like Robinhood and eToro have built massive trading businesses, their revenues combined don't even come close to what JPMorgan makes from investment banking.
00:09:21 · Jonny Pease, Nik Storonsky
So the question is, can Revolut go beyond retail and start offering corporate investment services? And these are some of the most profitable businesses in banking. But they also represent Revolut's biggest challenge. Because these aren't just highly lucrative industries, they are some of the most regulated in the world. It takes decades to build the trust, reputation, and regulatory approvals needed to compete at this level. And in an industry dominated by legacy banks, Revolut is still considered a startup fintech and not a financial powerhouse. And even they admit the regulation, licensing, and trust are their biggest hurdles to expansion. Storonsky has even said that if you're building a bank, it's better to get licensed before you get customers. [00:10:05] S1: I think it will be much easier for us to receive all the bank ELIs that we needed when we were small. [00:10:10] S0: Because once you've got millions, the scrutiny gets much tougher and the whole process takes a lot longer. And that's the real challenge, time. Traditional banks have spent decades navigating regulations, securing licenses, and building the infrastructure that allows them to operate across global markets. Revolut are trying to do all of that in just a few years. So the question is, can they actually compete with legacy players? Can they go head to head with the likes of JPMorgan, Goldman Sachs, and HSBC? Well, maybe. But this isn't a business they can enter overnight. And if they're serious about hitting 100,000,000,000 [00:10:46] S1: revenues a
00:10:48 · Jonny Pease
[00:10:48] S0: year, they might not have the time to wait. And that's where things get most interesting because there is one technology that could let them scale faster than any bank in history. Something that could help them skip years of slow expansion, automate banking services and unlock entirely new revenue streams. AI is the biggest technological shift of our generation and in banking, it has the power to completely redefine the industry. Revolut has already teased their own AI powered assistant designed to help customers manage their money more efficiently. AI in banking could be Revolut's golden ticket to scaling revenue in ways traditional banks just can't. Because while most banks are still playing catch up in the digital age, Revolut has the chance to embed AI into its business model from the ground up. And if they can get it right, it won't just make them more efficient, it could make them a whole lot richer. According to industry leaders, AI could unlock $1,000,000,000,000 in banking revenue not just by creating new income streams, but by slashing costs in compliance, risk management, and customer service. And that's where things get interesting. Because Revolut isn't just competing with traditional banks on products. It's competing on efficiency. And AI could allow them to scale those most profitable areas of banking without needing to hire thousands of employees or spend decades building out infrastructure. We know lending is one of the biggest moneymakers in banking, but it's also one of the riskiest. Traditional banks rely on outdated credit scoring models using static data points to decide whether you qualify for a loan. But AI changes everything. By analyzing real time spending habits, transaction data, and broader economic trends, AI can offer personalized credit at scale, approving loans instantly while dynamically adjusting rates based on risk, and even predicting who is likely to default before they do. And this isn't just theoretical. AI driven lending is already disrupting traditional banking and companies like Upstart and Oak North have shown that AI based credit models can outperform traditional banks on risk assessment while scaling faster. And if Revolut taps into this, they wouldn't just be another digital bank. They'd be an AI powered lending machine and that is a multi billion dollar opportunity.
00:13:00 · Jonny Pease
The world's biggest banks like JPMorgan and Goldman already use AI to analyze markets, predict financial trends, and execute trades at lightning speeds. For Revolut, this presents two major opportunities. First, AI driven portfolio management, essentially robo advisors but on steroids. Now most automated systems follow simple rule based logic. If a stock hits a certain price, it buys or sells. But AI could take this further. Just imagine Revolut offering its ultra account holders or high net worth clients an AI powered wealth manager that continuously tracks their spending and investing, understands their risk tolerance and analyzes market trends to optimize their portfolios in real time. This could democratize wealth management, bringing hedge fund level strategies to everyday investors without needing a human financial advisor. And it doesn't stop at retail investors. Breaking into global finance isn't about having the right products. It's about trust. JPMorgan, Goldman, HSBC, these institutions have spent decades building credibility with regulators, governments and corporate clients. Revolut just doesn't have that legacy or reputational credibility, but AI could help them prove their value faster than traditional banks ever could. With AI powered risk management, Revolut could offer businesses and hedge funds smarter fraud detection, compliance automation, and real time risk analysis. With AI driven liquidity management, they could help companies optimize how they move and allocate money. And with predictive analytics, Revolut could sell high frequency trading insights and market forecasts to hedge funds and investors. But here's the game changer. Revolut doesn't just have to use these AI powered finance tools. They can license them. Instead of relying solely on their own banking products, Revolut could turn their AI infrastructure into a SaaS business. And they already know how to do this because they're doing it with Revolut People, an HR service that they originally built in house which they now license to other companies. This wouldn't instantly make them JP Morgan but it would get them in the room, allowing them to build credibility in institutional finance without having to wait decades. And that brings us to the final piece of the puzzle: capital.
00:15:10 · Jonny Pease
Because even with AI, scaling at this level requires serious funding, which is why an IPO now feels inevitable. If Revolut wants to scale into lending, investment banking, global finance, they need more firepower, and an IPO would allow them to raise billions in public money. And we've seen massive fintech IPOs such as Robinhood, NewBank, and Wise, which prove that the market is willing to back digital finance companies with strong growth potential. But the problem is that markets demand profitability and stability. An IPO would mean more scrutiny. It means reporting quarterly earnings. It means proving to investors that they have a clear and sustainable path to profitability. So while going public could fund their expansion, it would bring enormous pressure. But if Revolut is serious about being the world's bank with a $100,000,000,000 in revenue, then there's no way around it. They will need more capital, more credibility, and more regulatory approvals. And the fastest way to unlock all three is through an IPO. And that brings us to the final unavoidable challenge in Revolut's a $100,000,000,000 road map, The United States. Because no matter how much they grow in Europe, Asia, or South America, no matter how many new features they launch, if Revolut wants to be the number one global bank, they must succeed in The US. What is your strategy to crack The US market, which you haven't really cracked yet?
00:16:30 · Nik Storonsky
[00:16:30] S1: So the way market is structured in The US, everything is credit card driven. There is 2% interchange. So for every $100 transaction, bank is receiving $2. And then if you just launch a debit card, interchange is only, I don't know, half percent in The US. So you cannot really compete with credit card. As a result, if you are not a bank in The US, you cannot issue credit card online. You cannot win the market.