Fintech pioneer Revolut wants to expand its lead over Swiss neobanks. However, a payroll account is still not available.
Revolut was the first neobank offering in Switzerland in 2017.
The range of financial apps is now large. Swiss providers such as Neon, Yuh and Zak offer customers user-friendly and cost-effective banking services. You can carry out almost all daily banking transactions on your cell phone using an app.
But the most successful app to date is a foreign one: Revolut. This was available from the end of 2017 as the first financial app from a neobank in Switzerland. She has maintained her top spot to this day. According to the company, 900,000 people use the app in Switzerland. No other neobank is better known.
This is hardly surprising; Revolut is considered a pioneer among financial apps. Since it was founded in 2015 by Russian banker Nikolay Storonsky and Ukrainian software developer Vlad Yatsenko, Revolut has attracted 45 million retail customers worldwide. Swiss providers only have a few hundred thousand customers.
Still no payroll account available
Now Revolut wants to expand its strong market position in Switzerland with a greatly expanded product range. Things could get uncomfortable for the local neobanks, because Revolut is already the most used financial app with a market share of around 17 percent – ahead of Yuh, Neon, CSX and Zak.
«We want to expand Revolut into the main bank. It shouldn’t just be a card for going on vacation,” says Wiktor Stopa, sales manager for Western Europe at the fintech company. Until now, Revolut has been known primarily as a cost-effective debit card that is often used abroad for payments in foreign currencies.
However, domestically the offer was limited. Revolut did not offer any Swiss accounts, everything went through the British parent company. It was not possible to hold a salary account with the neobank; payments must be processed via the partner Postfinance. Additionally, depositing into a foreign Revolut account costs fees, which annoys customers. This gave the Swiss competition an advantage.
Revolut users become customers of a Lithuanian bank
Revolut now wants to change that. So that the fintech company can become a house bank through which payments, savings and investments can be made, it has repositioned itself. To do this, existing users must become customers of Revolut Bank UAB, which is authorized in Lithuania. This in turn has set up a branch in Zurich in Switzerland, with the approval of the Financial Market Supervisory Authority (Finma).
For its part, Revolut Bank UAB is supervised by the European Central Bank and the Lithuanian authorities. The provisions of the local deposit insurance apply. However, these only cover systems up to 22,000 euros. Deposits with Swiss banks are insured up to an amount of 100,000 francs.
Revolut has been active in Switzerland since 2017, but employees have only been here since last December. There should be ten by the end of the year. Thanks to the well-known brand, the fintech company still grew quickly. According to the company, demand is still high, with 700 new users joining every day – and companies also use the app, now there are 10,000.
In the past few weeks, Swiss providers such as Swissquote and Yuh have expanded their offerings, for example with ETF savings plans that were previously rarely available. However, these efforts were not decisive for Revolut’s product offensive: “What the competition does is not that important to us,” says Stopa, who is supposed to drive growth in Europe. Revolut is already top in the download rankings and there is strong organic growth.
Finally competition for ETF savings plans
The investment offer is simply the next lever that will bring growth in Switzerland, says Stopa. As a first step, Revolut wants to provide access to 3,000 European and American stocks and ETFs. Swiss stocks will only be added later.
But when it comes to everyday transactions, Revolut cannot yet keep up with the Swiss financial apps. Domestic payments are possible, but the important wage account is still not available. There are also no established banking services such as e-Bill or Twint yet. Discussions are ongoing to “localize” the offer for Switzerland.
“Revolut wants to offer the same product in all countries,” says Stopa. This also includes a robo-advisor – this is automated, digital asset management. In addition, a free offer with ETF savings plans will follow “soon”. These have long been established in Germany and are now spilling over into Switzerland and Austria. The ETF savings plans will be free of charge; we see a gap in the market. “We don’t have any existing products that we need to protect,” says Stopa.
In fact, there has recently been movement in the market for ETF savings plans in Switzerland. Neon, Yuh, Saxo Bank, Swissquote and most recently Postfinance have launched new ETF-based savings plan offers. However, the range of funds and the fees for these “free” savings plans differ significantly. Revolut is likely to further fuel competition.
