Finance

Revolut's UK Chief Spearheads Efforts to Solidify London's Fintech Throne Amidst Escalating Global Competition

In the global race to dominate the dynamic sector of financial technology, London finds itself at a crucial juncture, striving to maintain its prestigious status as the home base for fintech innovation. The city's position is increasingly challenged by aspiring hubs like Paris and New York, both aggressively vying to attract the most promising finance startups. Francesca Carlesi, the newly appointed UK boss of Revolut Ltd., has voiced her concerns over this potential decline, emphasizing the urgent need for measures to prevent the emigration of talent from the city.

Carlesi, who joined Revolut in December, has assumed her new role with a clear objective to reinforce London’s stature in the fintech space. This week, she made her commitment unequivocally clear by participating in the inaugural "Unicorn Council" – a group consisting of the UK's heavyweight fintech firms convened by the trade organization Innovate Finance. The council's agenda is to advocate for government policies that are conducive to the growth and prosperity of startups.

London's Pioneering Days and Present Uncertainties

Historically, London emerged as the frontrunner in launching digital banks in the aftermath of the financial crisis. However, Carlesi points out that the last two or three years have seen a significant shift. She insists that despite shortcomings in the regulatory framework, which Revolut co-founder Nik Storonsky has criticized for being a bottleneck for businesses, the city retains its central position on Revolut’s map for a future initial public offering.

"The UK is our home and also the source of a significant number of our investors," Carlesi articulated in an interview, her first since assuming her new position at one of Europe's most prominent fintech entities. "Broadly, companies stand to benefit when they list in markets where their primary customer base is located." That said, the focus isn't currently on listing – it's a decision that will hinge on a variety of factors.

Recognizing the Importance of Global Investor Confidence

With global investment heavyweights such as Sequoia showing a burgeoning interest in the region's fintech scene, the expectation is to see homegrown companies being fostered into potential global leaders within the sector. “Nurturing those that are born here is crucial for them to ascend to the top of the global ladder,” Carlesi elaborates, highlighting the vital role of investor confidence in the regional growth narrative.

Revolut's Challenges and Commitment to UK Market

Revolut, a behemoth in European fintech, grapples with several internal challenges as it patiently awaits the UK banking license that has been pending for over two years – a critical stride for its core market. "Trudging through these challenges is part of the journey. We’re methodically moving the needle in the right direction," asserts Carlesi, attesting to Revolut’s commitment to overcoming these hurdles.

A Vision of Shared Ambitions

Before her engagement with Revolut, Carlesi co-founded Molo, a digital mortgage lender, which she then sold a majority of to Australian finance company ColCap. Her storied career comprises roles at Deutsche Bank AG, Barclays Plc, and McKinsey. Carlesi speaks of an instant rapport with Revolut’s CEO Storonsky, both having pivoted from traditional banking careers to embrace startup uncertainty. Their aligned philosophy, she says, pivots around Revolut’s potential to stand shoulder to shoulder with America's tech giants – a status that has eluded the big banks.

"Envisioning a global platform that caters to specific needs in different countries is exactly what Revolut is striving for," Carlesi explains, setting sight on a unique challenge that has yet to be mastered by the conventional banking behemoths.

The Financial Juggernaut's Growth and Investor Base

Despite its challenges, Revolut, last valued at a colossal $33 billion in a 2021 funding round, has expanded its tentacles to 38 nations. It boasts a significant presence in the UK with 1,200 employees and eight million customers – a substantial fraction out of its near 40 million global customer base. Its roster of heavyweight investors includes names like SoftBank Group Corp. and Tiger Global Management.

The Evolution to a Trusted Fintech Player

As Revolut transitions from an industry disruptor to a revered entity, Carlesi is zeroing in on issues that have impeded the firm’s UK banking license application. This includes simplification of its share structure and addressing auditor concerns from last year regarding revenue verification. Showcasing optimism, Carlesi remarks on the firm's progression with the 2022 accounts and their ambitions to hit the $2 billion revenue mark in 2023. In the wake of a CFO departure, a permanent replacement has yet to be announced, but Revolut reassures that past revenue-tracking discrepancies have been rectified.

The Algorithmic Superpower Against Fraud

Revolut's aggressive addition of roughly one million customers per month is indicative of its substantial growth velocity. However, Carlesi underscores the capability to modulate this growth rate if needed. Furthermore, she points to the company's prowess in leveraging artificial intelligence and machine learning as its "superpower" – pivotal tools in battling fraud and assisting the sector to better handle predominantly online-originated scams.

Culture at Revolut: Intensity Meets Transparency

Toxic workplaces are no novelty to Carlesi, who acknowledges the challenges in instigating change within large institutions. However, she perceives Revolut as an outlier. "The culture here is high-intensity, but it thrives on transparency and embraces open, constructive challenges,” she states. “In this environment, speaking one's mind is not just accepted but is typically rare."

In Closing

Bloomberg's Aisha S Gani contributed reporting to this article. For more information, you can read the original article on Bloomberg's website at Bloomberg.

©2024 Bloomberg L.P.

This comprehensive glimpse into Revolut and London’s fintech ecosystem signals a critical phase for the city amidst escalating global competition. Spearheaded by figures like Carlesi and backed by powerful investors, the stage is set for London to fortify its leading role in this high-stakes financial revolution. As the narrative unfolds, the industry eagerly anticipates the strategic maneuvers that will determine the future prominence of London's fintech scene.