Revolut has had a fee questionable moments already, this does not seem to have been the case for other European fintech operations (wise, klarna, n26 etc).
So yeah, I think a lot of fintech is not particularly good, but I don't think we can generalize to the level of the crypto boom.
The FCA (UK regulator) is also refusing to issue them a banking license, even a challenger bank one. It is still operating under their Lithuanian banking license.
I really don’t understand why so many people in the UK use it as the deposits are not FSCS protected so if something goes wrong you’re fuck out of luck.
It always was a very simple way to handle remittances for European migrants, and to get travel money for everyone else. Some people then got carried away, probably because their PR was always pretty good.
I had to warn a friend of mine who kept 5-digit savings in there. He didn't know about the lack of banking license (and this was even before they got the Lithuanian one) and was pretty shocked.
> I really don’t understand why so many people in the UK use it as the deposits are not FSCS protected so if something goes wrong you’re fuck out of luck.
I wonder if this is the kind of lesson that needs to be re-learned every few generations?
Why do they do it? Is it a reaction on regulator critique, or a plain "let's lock this account up to take some money" dumb (or smart?) profit-generation?
1. A dumb money laundering detection algorithm that does it's thing with 0 human interaction (basically the same reason people get locked out of their Google accounts for no reason).
2. Untrained and insufficient customer support (again similar to Google).
3. In my case: asking for documents to prove residency (they're supposedly legally obligated to do so,, but none of my other banks ask for this). The documents they ask for cannot be produced by someone who shares an appartment in the EU (no bills in my name, no rent receipts in my name, no address on ID cards). Game over. Account and card blocked. 0 flexibility from customer support, 0 help.
I guess this is a bit like my take on Uber - they may be rotten to the core and damaging the very fabric of society, but at the very least they pushed competitors of all kinds to improve the hailing/ordering experience, so now taxis and rideshares around the world can be ordered via an app, with built-in map and address search.
Back to Revolut - I'm of two minds about bank apps. On the one hand, good apps are good, and some things really get streamlined this way. On the other hand, this only sets us up for another battle in the war on general-purpose computing: a fight over mobile device ownership.
Banks didn't just improve the UX of their apps. Some made them the primary or sole remote interface to one's accounts. Many (most?) are now using apps for 2FA, and heavily pushing it - with such banks, using the web interface from a PC browser still requires confirming any meaningful operation via the smartphone app.
The problem here is, banks are one of the most eager users of remote device attestation features, and (by being big and full of money) they have all the leverage over users and smartphone vendors alike. Many bank apps will refuse to run if they detect the phone isn't pristine and fully locked down by the vendor - and with modern phones now coming with built-in APIs for such checks, rooting the phone or flashing it with custom firmware is quickly losing all value. After all, what good is a rooted phone if you can't use it for anything important that smartphones now do?
Banks want to sink as much data from the consumer device as possible. Remember bank app wants a permission to access all files and calls and messages and location and physical sensors?
They don't care about security other than for avoiding devices that gives user a control over what data is accessible.
Security in banks is generally very basic (anyway, everything is covered with insurance, which is paid by the users, in the end).
User data is used mainly to calculate credit rating and for upselling.
Well, yeah, they should really aim to clone the stability and efficiency of traditional banks, like the target of any bank should really be to mimic the operational beauty of Deutsche Bank, Santander, Monte Paschi, ABN Amro, and so on.. they're the pillars on which our society is built upon
Fintech just means your valuation is based on how long you can expect to get away with ignoring checks and balances. You're no longer pre-revenue, just pre-regulation.
So yeah, I think a lot of fintech is not particularly good, but I don't think we can generalize to the level of the crypto boom.