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Hmm. At least with revolut, app only means they can do infrequent SMS auth (for setting up a new phone) and otherwise use the stable phone for auth. I suppose t
by md_ 8y ago
Hmm. At least with revolut, app only means they can do infrequent SMS auth (for setting up a new phone) and otherwise use the stable phone for auth. I suppose the key point here is that requiring their users to have a smartphone allows them to really simplify auth, but that doesn’t preclude also offering a website. Maybe they just don’t think most users would want it? (My personal usage of revolut is quite limited and the app works fine for me.)
Maybe the bigger question I have here is what the core innovation is. I use revolut for the cheap currency exchanges, but there’s no reason any other bank couldn’t offer that. Maybe the market for such services is just very small, or most traditional banks make more money by selling add on services (mortgages, say) based on a very tight relationship (vs revolut’s more temporary/limited usage model).
- fpoling 8y agoThe core innovation is to make the app really polished and straightforward to use to cut the support costs. Traditional banks may not care about it enough as in the worst case they can direct the customer to a local office.
- incompatible 8y agoThat applies equally to online-only banks (i.e., websites), which are hardly a new innovation.
- tixocloud 8y agoYou're spot on. I'm in strategy and we monitor the challenger banks regularly. Very little money is earned from things like current accounts, which is what all these app-only banks. Money is to be made in loans, mortgages and credit cards. Despite all the great hype, they are still a tiny proportion of the number of customers that mainstream banks have. Great app, great user experience but would be interesting to see how profitable these challenger banks are.
- md_ 8y agoFWIW, revolut appears to be aimed st selling different (probably lower overhead) services. Their premium accounts offer higher withdrawal limits, but they also sell cellphone insurance, etc. Still, as a skeptic, I can’t shake the thought that they’re just building market share at low profitability based on VC overexuberance.
- Semaphor 8y agoN26 offers loans, insurance managing (both via 3rd party but integrated) and premium accounts as a way for them to make money.
- lngnmn1 8y ago> Money is to be made in loans, mortgages and credit cards. Indeed, and for that you have to be a Wells Fargo-like behemoth with your own legal team, abilities to handle defaults, etc, etc. Big banks are big for a reason. Most of the app-only "banks" wants to be your transaction processor for a fee, essentially a middlemen. This is a standard strategy.