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Revolut’s Entry into the Mortgage Market: A New Era for Digital Banking

Revolut, the innovative financial technology company, is poised to revolutionise the mortgage market, marking another significant milestone in its journey to becoming a comprehensive financial service provider. With its extensive user base of over 2 million in Ireland alone, the company is gearing up to offer mortgages, adding to its already diverse range of services.

In a recent interview with the Irish Independent, Revolut’s co-founder and CEO, Nik Storonsky, revealed ambitious plans to introduce mortgages as part of their portfolio. “We will definitely do mortgages for consumers,” he confirmed. Storonsky criticised the current mortgage processes, highlighting the inefficiencies and lengthy timelines. “It can take one to two months. At best, it’s seven days. It’s all quite ‘legacy’,” he remarked, indicating the need for a more streamlined, digital approach.

Revolut’s mortgage offering aims to be entirely digital, providing a frictionless experience for users. Storonsky outlined two potential models: “The first one is a mortgage financed by us as a bank. Or it could be like a mortgage introduction.” He emphasised the goal of creating a 100% digital experience where users can apply for a mortgage, select a house, and complete the process entirely within the app. “Everything would be instant and automated,” he added.

While Storonsky did not specify a timeline for the mortgage rollout, the announcement underscores Revolut’s commitment to expanding its services. This development comes as part of a broader strategy to enhance the app’s functionalities, transforming it into a financial super app. The recent addition of messaging services further indicates Revolut’s ambition to integrate various aspects of financial management into a single, intuitive platform.

Revolut’s entry into the mortgage market is particularly significant given the context of its operations in Ireland. The company employs 135 people in Ireland, making it the second largest market after the UK. Storonsky highlighted the inadequacies of traditional Irish banking apps, which contributed to Revolut’s popularity in the region. “One of the reasons why we’re so popular in Ireland is because the banks are not good there,” he told the Irish Independent, pointing out the need for more efficient and user-friendly banking solutions.

The company’s journey in Ireland faced challenges, particularly with securing a local banking license. Despite a 30-month waiting period from the Central Bank, Revolut opted to operate under its Lithuanian banking license. Storonsky reflected on this decision, explaining that it was a pragmatic choice to ensure better customer protection and continuity of service. “It was more like a cost-benefit analysis for Irish customers,” he explained, indicating that the Lithuanian license was ultimately more advantageous.

Beyond the mortgage market, Revolut continues to expand its services, with the goal of becoming a financial super app. Storonsky envisions an all-encompassing platform where users can access a wide array of financial services, from trading and crypto transactions to loans and foreign exchange. “Ultimately, we want to have in one app all the financial services that people use, in a simple, intuitive and cost-effective way,” he told the Irish Independent.

As Revolut prepares to disrupt the mortgage market, it stands at the forefront of digital banking innovation. The company’s vision of a fully automated, digital mortgage process is set to redefine customer expectations and streamline the home-buying experience. With its expanding range of services and growing user base, Revolut is well on its way to becoming a dominant force in the financial sector, challenging traditional banking norms and setting new standards for the industry.