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Revolut in 2025 – Is FinTech Eating the Banks’ Lunch?

Pat Crawley

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revolut-in-2025-–-is-fintech-eating-the-banks’-lunch?

2024-12-02T11:15:02.162+02:00

Monday, 02/12/2024 | 09:15 GMT by Louis Parks

Revolut to roll out smart ATMs, AI-powered banking, and mortgages in an ambitious 2025 strategy.
The hybrid model blends physical touchpoints with digital innovation.
Traditional banks face pressure to modernize in the face of nimble FinTech competitors.

Revolut’s bold new strategy hints at a future where FinTech dominates physical and digital banking. The squeeze on traditional banks gets going.

The FinTech giant’s plan includes AI-driven banking assistants, mortgages, business credit, and—wait for it—actual physical ATMs. Yes, Revolut, the poster child of the digital-first banking movement, is now dabbling in the physical world.

The message is clear: this isn’t about niches. Revolut wants it all—your mortgage, your business credit line, and even your cash withdrawals. But, let’s break down what this means for the financial industry and whether traditional banks can keep up with this audacious expansion.

Smart ATMs: The Comeback of Cash (With a Twist)

Revolut’s smart ATMs might seem like a contradiction. After all, aren’t we living in a cashless future? Apparently not entirely as the company aims to bring out physical ATMs in Spain early next year. Revolut’s move suggests that even digital-first banks recognize the enduring value of physical touchpoints and a real-world presence.

This hybrid model —where digital platforms meet traditional infrastructure—could set a new industry standard. And for the FinTechs, it’s not just about convenience, it’s about accessibility and customer trust. Smart ATMs could also serve as a subtle gateway for new markets, targeting customers who might still be hesitant to go fully digital, but who trust a more physical experience.

For traditional banks, this raises an uncomfortable question: if Revolut is offering everything you do but with more convenience, what’s left for you? The answer may involve rethinking physical branches and/or investing in similar smart infrastructure. But, this isn’t a game they typically play well. Either way, the game has changed.

AI Assistants: The New Battleground for Customer Loyalty

While ATMs grab attention due to the apparent pivot, Revolut’s artificial intelligence (AI) banking assistant is the real showstopper. Imagine Siri but with financial expertise and way fewer errors (?). This feature isn’t just about answering your questions, it’s about anticipating your needs, offering tailored advice, and transforming personal finance. Revolut is aiming for a gradual roll-out over 2025.

50 million customers in 38 markets over 9 years.

That’s a milestone worth celebrating 🎉

Thank you to every single customer across the world who’ve helped us hit this milestone. Let’s keep revolutionising the way the world does money, every day.

And we’re only just getting… pic.twitter.com/e2KXUrleiZ

— Revolut (@RevolutApp) November 19, 2024

AI is shaping up to be the key differentiator in the FinTech arms race. Other FinTechs like Klarna, NU, and Inter are already vying for dominance in this space, but Revolut is surely the big boy here. Meanwhile, traditional banks, notorious for clunky apps and slower adoption of AI, are at risk of being left behind.

The bottom line? Personalized, AI-driven banking could soon be the standard. If legacy banks don’t adapt quickly, they’ll find themselves losing not just tech-savvy millennials but also older customers drawn to the convenience and intelligence of FinTech platforms.

Mortgages and Business Credit: A Full-Service Financial Revolution

Revolut entering the mortgage market is bold and it’s brilliant. Mortgages and business credit are the crown jewels of traditional banking. By moving into these areas, Revolut is positioning itself as a true full-service financial institution.

This expansion is likely to send shockwaves through the industry. Mortgages and business loans have long been bread-and-butter products for banks, offering steady revenue streams. If FinTech companies start to chip away at this market, traditional banks could see their most profitable segments under siege and they’ll need to innovate. The company confirmed plans to launch mortgages in Lithuania, Ireland, and France in 2025.

Revolut Business: Disrupting the Status Quo

Revolut Business is set to shake up 2025 with its first European business credit product and plans to offer top-tier EU savings rates. Adding to the disruption, Revolut Kiosk will streamline operations for restaurants and stores, with biometric payment options in the works.

Revolut Business 5: key updates for businesses (a thread) pic.twitter.com/72QPZQrGES

— Revolut Business (@RevolutBusiness) November 19, 2024

Meanwhile, Revolut Pay continues to expand and is promising Buy Now, Pay Later (BNPL) functionality soon. For traditional banks, these moves hit at core profit centers like credit and SME services. But, if they don’t adapt quickly, Revolut’s innovation could steal a significant slice of the business banking pie.

The Ripple Effect: Mergers, Acquisitions, and Regulation

Revolut’s ambitious roadmap doesn’t just shake up the competitive landscape—it could also lead to a domino effect of industry-wide changes. For one, expect to see more partnerships and acquisitions as both banks and Big Tech scramble to match FinTech’s innovation.

But this rapid evolution won’t go unnoticed by regulators. AI-powered financial advice and biometric authentication are ripe for scrutiny. Expect tighter regulations in these areas as authorities grapple with the ethical and security implications of these technologies.

What’s Next for Banking?

Revolut gets UK trading license, set to offer UK & EU stock trading https://t.co/e1zUWpxZNZ pic.twitter.com/QMjWGrzrmW

— Reuters Business (@ReutersBiz) November 18, 2024

Revolut’s 2025 vision is perhaps a glimpse into the future of finance and personal banking. By blending physical and digital services, leaning into AI, and challenging traditional profit centers like mortgages, Revolut is pushing the boundaries of what a FinTech can achieve.

For traditional banks, this is both a warning and an opportunity. Adapt and innovate, or risk irrelevance in a world that’s moving faster than ever.

You can read Revolut’s post on their 2025 vision here.