Revolut is moving closer and closer to operating in the capacity of a traditional bank, with Ireland apparently set to become the pilot market for its mortgage ambitions.
According to The Irish Times, Revolut is holding talks with Irish mortgage brokers and is debating whether it should issue house loans through said brokers or directly to its customers.
The outlet also states that Revolut claims to have over 2.7 million customers in Ireland, representing a significant portion of the Republic’s economically active, over-18 population.
Should this be accurate, Revolut could pose significant competition to the established Irish retail banks. Ireland’s banking sector has been dominated for some time by the likes of Bank of Ireland, Allied Irish Banks (AIB) and Barclays Ireland.
Moving into mortgages is a logical next step for Revolut due to the London-based neobank having long-held ambitions to step up its activity in the traditional banking sector.
The firm passed a landmark moment earlier this year when it secured a UK banking licence, an accolade that had long eluded Revolut in its home market despite other neobanks like Monzo doing so.
Despite struggling to obtain a UK banking licence for some time, Revolut has built up a solid customer base both in its home market and further abroad. With this has come substantial revenue and investment.
This all came to a head last month when the company was valued at $45bn (£34.5bn), making it Europe’s most valuable startup. The company passed the finish line through an employee share sale, facilitated through major traditional bank Morgan Stanley.
The growth experienced by, and ambitions laid out by, emerging neobanks and fintechs should be monitored closely by well-established traditional banks. These new players have already been making a good impression with customers, as the UK’s Competition and Market Authority (CMA) has observed.
According to the CMA’s last customer satisfaction survey, Monzo and Starling Bank had the best reception from customers, with fellow challenger bank Tide holding joint third place with Swedish traditional bank Handelsbanken.
As and when more challengers get involved in traditional banking activities, predominantly lending, the old school banks may find themselves losing customers to this new generation of financial institutions.
