Revolut’s new chief operating officer promised to strengthen the digital bank’s governance and move on from recent controversies as it attempts to seal Europe’s largest ever fintech fundraising.
Richard Davies, a banking veteran who previously held senior positions at TSB and HSBC, is one of a number of senior hires from the traditional finance sector that Revolut has made in the past few months.
The bank, which now has almost 6m customers, has been attempting to improve its image following criticism over issues including the quality of its compliance systems, an aggressive working environment and links to Russia.
In his first interview since joining the $1.7bn start-up, Mr Davies said the group would prioritise strengthening its controls even as it aimed to outperform its peers in the digital banking sector.
“You can see from the appointments we’ve been making — not just myself but also at the board level — we have a really wide range of executive hiring coming through to round out the capabilities, and simultaneously are working on the wider internal control environment,” Mr Davies said.
“We’ll really make sure that we’ve got governance and controls moving at the same pace as the commercial growth environment.”
Revolut is close to hiring City veteran Martin Gilbert as its chairman. Former Goldman Sachs executive Michael Sherwood is also join the board, following two earlier appointments in March.
On the executive team, Mr Davies will soon be joined by a new chief financial officer who is expected to have extensive retail banking experience.
Mr Davies said he considered reports of Revolut’s demanding working culture — the company has faced accusations from former staff about bullying and burnout — before accepting the job, but was convinced after talking to more than a dozen existing employees that the environment was “maturing”.
Revolut is planning to raise up to $500m from investors before the end of the year. The current record for the largest fundraising round by a European fintech is SoftBank Vision Fund’s $440m investment in OakNorth this year.
“It’s going to be a very adventurous few months,” said Mr Davies. “We’ll take some of the lessons learned from the past, put stuff firmly behind us.”
Revolut has grown rapidly from its beginnings as an app offering cheap travel money in 2015, and now has a full banking licence in the eurozone.
Investors have sunk more than $1bn into European digital banks over the past 12 months, despite the fact that few are profitable.
Mr Davies said Revolut was not desperate for cash to keep subsidising lossmaking services. He said fresh investment would help the bank speed up customer growth through marketing, and support its capital position as it attempted to secure new banking licences. He suggested its core business was close to being sustainable on its own.
Rather than building a business around lending like most traditional banks, Revolut has relied on fees generated by offering premium perks such as travel insurance and concierge services to customers who pay a monthly fee.
The company has yet to report its 2018 financial results, but Mr Davies said the model “works extremely well financially”.
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