UK’s biggest fintech uses Australia as template for global growth
Revolut is a startup superstar. The London-based fintech was founded in 2015 and is now worth US$33 billion.
The company launched in Australia in mid-2019 as part of its wider global expansion strategy. In this case study, the CEO of Revolut Australia, Matt Baxby describes Revolut’s journey down under, including:
– why Revolut chose Australia as a pilot for international expansion
– the emerging fintech landscape and opportunities in Australia
– how Austrade helped Revolut enter and launch in Australia.
Australia is a great learning ground for global fintechs
Revolut has built a financial super-app that helps customers manage multiple areas of personal finance in one place. By mid-2021, Revolut had gained 16 million customers and had become the UK’s most valuable fintech.
Baxby says that consumer appetite for digital technology makes Australia a great place to pilot and develop a fintech business. Additionally, he points out that Australia’s regulatory environment is very encouraging. It is open to fintech innovation, he says.
‘It took us 9 months to obtain an Australian Financial Services Licence (AFSL),’ says Baxby. ‘But during the application process we were permitted to use our UK e-money licence as part of a temporary licence exemption.’
The exemption enabled Revolut to beta test their product in Australia. It also enabled Revolut to build and tweak features to meet the needs of our Australian users before the official launch.
‘Australia has a familiar regulatory regime and high quality fintech talent. This makes Australia an attractive market for Revolut’s expansion outside of Europe.’
COVID-19 has accelerated the shift towards digital banking
The CEO observes that COVID-19 has had a drastic impact on consumers’ habits and behaviours. It has accelerated the shift towards digital banking. He says this trend exists in Australia as much as it does elsewhere.
‘An uncertain economic environment has made people more aware of their financial security,’ he says. ‘As an offshoot, this has led to a spike in demand for innovative financial products such as commodities and cryptocurrencies.’
‘This diversification is happening at the same time as a rapid digitisation of Australians’ lives,’ he adds. ‘This leads us to believe that Australians want to manage financial transactions in one place.’
Austrade helps fintechs make contact with stakeholders and government agencies
Since 2017, Austrade has played a role in helping Revolut to launch in Australia. Austrade advisers introduced Revolut to key stakeholders in the Department of Treasury, the Australian Securities and Investments Commission (ASIC) and the Open Banking Review, as well as FinTech Australia.
All these contacts proved useful for the global fintech as it scoped the local market for entry.
‘Introductions made by Austrade have helped us to navigate the local regulatory and compliance environments,’ says Baxby. ‘This has been a key enabling factor for us. We had to work through the pandemic to customise and build Revolut for its final launch in Australia.’
Australia offers a thriving ecosystem for fintechs
Austrade also assisted Revolut by providing early insights into the Australian market.
‘Initiatives such as the UK–Australia Fintech Bridge allow us to make connections across the ecosystem,’ says Baxby. ‘This helped us get a better understanding of the market prior to launch.’
Austrade also kept Revolut informed about available government grants and programmes. These proved helpful as Revolut took its initial steps into the Australian market.
‘We believe the resilience and growth shown by fintechs in Australia during such challenging times highlights the maturity of the industry in Australia,’ he says. ‘In many ways, it is testament to the efforts of a supportive ecosystem. This bodes well for the future of fintech in Australia.’
Australia is a gateway to fintech markets in Asia-Pacific
Revolut now has a presence in over 35 countries and processes over 150 million transactions per month. It is currently building teams for major markets across the Asia-Pacific region.
‘As our first foray outside of Europe, Australia has been a key market – including as a testing ground for informing our global expansion strategy,’ says Baxby. ‘Australia can also serve as a gateway to markets in the region because of its location and economic ties’.
Baxby says that Revolut gained valuable insights from localising its globally scalable product to meet Australia’s high regulatory standards. Meeting high customer expectations has also been instructive. He says the launch experience in Australia will likely prove helpful elsewhere.
‘We are encouraged by the response we received to our initial public launch,’ says Baxby. ‘This gives us the confidence to use our Australian market entry approach as a template for global growth.’
Revolut is now looking to expand its footprint in the region, including launching operations in India, South Korea and the Philippines.
The Australian Trade and Investment Commission (Austrade) is the Australian Government’s international trade promotion and investment attraction agency.
We deliver quality trade and investment services to businesses to grow Australia’s prosperity. We do this by generating and providing market information and insights, promoting Australian capability, and facilitating connections through our extensive global network.
To discover how we can help you and your business, visit austrade.gov.au or contact us on 13 28 78 (within Australia).
About FinTech Australia
FinTech Australia is a member-driven organisation that is building an ecosystem of Australian fintechs to advance the global economy and culture. We are here to build a strong community, foster connections while supporting innovation and regulation that our members require. Above all else, we are here to be the voice of the Australian fintech community
Whereas every effort has been made to ensure the information given in this document is accurate, the Australian Trade and Investment Commission does not provide warranty or accept liability for any loss arising from reliance on such information.
©Commonwealth of Australia 2021