evolut has dominated the fintech market lately. Launched in 2015, the British fintech startup proposed a simple solution to international transfers - no fees, lightning-fast processing. On top of the strong architecture of their software, a simple UI helped push the company to the forefront of the financial market.
Since 2015, Revolut has launched a ton of updates, including products that let you do budgeting, stock trading, cryptocurrency trading, overseas insurance, and a lot of other convenient functionalities.
So they grew fast.
And May of 2020 marked their bravest endeavor yet - they launched a digital bank in Lithuania, where 300.000 of their customers already awaited. The launch came as no surprise to many people since Revolut relocated to Lithuania and Ireland due to fears of Brexit affecting their work.
In tune to their customer service, Revolut users in Lithuania can upgrade to an official bank account in a matter of minutes, as stated in their press release:
“Lithuanian customers upgrade to Revolut Bank in a matter of minutes. Simply update to the latest version of the app, and follow the instructions from the news banner on the main app screen. The whole process should only take a few minutes.”
Right now, the only benefit is that you get the protection of up to 100,000 € for your accounts. But in the future, Revolut will also launch credit products:
“In the coming months, we'll be launching consumer loans and credit cards in Lithuania. We're keeping the details on the low right now, but as always, we'll look to come in cheaper and faster than the traditional banks.”
Moreover, Lithuania is a testing ground right now, with plans to set up a digital bank all across Europe in the near future.
But What Is Digital Banking?
Simply put, digital banking is just like regular banking - setting up an account, transferring funds, getting a loan, creating a savings account - but it’s all happening digitally. That’s the difference between digital banking and traditional banking.
But that goes both for the consumers, and the bank.
What you see as a consumer is just a device screen. You don’t have to sit in line to deposit funds, and you don’t need to make a trip to the bank to get a loan.
But digital banking is more than just customer facing.
With digital banking, the bank processes are automated as well. No employee has to sit and approve transfers in bulk. It’s all happening seamlessly. As you can guess, this implies the use of big data and new engineering developments to provide a wholesome customer experience. Moreover, that is the difference between digital banking and online banking.
And let me tell you - the banking industry? They don’t like this improvement that much.
Digital banking is pushing the entire banking industry to innovate. When Revolut gives you instant, commission-free international transfers, you’re less likely to go to a traditional bank. Simply put, you get a better customer experience with new digital banking startups.
But that doesn’t mean all traditional banks are harrumphing and trying to fight the disruptive digital banking startups. A lot of them adapt and start to implement digital banking in their processes.
It’s not easy.
And I can’t even begin to explain the intricacies of transferring our entire banking system in the digital world.
But one thing is clear: we’re slowly moving in that direction.