Revolut plans to market its customers' data

Despite its strong performance and ever-growing user base, Revolut is looking for new sources of revenue. One of the options under consideration is the commercialization of user data. The neo-bank's objective would be to partner with advertisers in targeted advertising, with the aim of generating additional sustainable revenues.

FACTS

• Revolut is planning to commercialize its customers' data and is already starting to work in this direction.

• According to the neo-bank, targeted advertising could represent a significant proportion of its revenues in the near future.

• This idea is based in particular on the number of users of the application. An audience large enough to benefit from potential partnerships with advertising companies.

• Revolut has already begun deploying its data commercialization strategy:

• The company has announced that it has recruited a former head of e-commerce partnerships from TikTok UK, with the aim of leading a team of around 30 people dedicated to the subject.

• It has also reportedly already made contact with advertisers and distributors interested in exploiting the app's advertising pitches.

• Negotiations for the sale of dedicated space on the app have also been launched.

• In terms of forecasts, Revolut has set itself the target of achieving over 300 million euros in revenues from advertising by 2026.

CHALLENGES

• Necessary diversification: This search for new revenue drivers is not insignificant. It comes at a time of mixed fortunes for fintechs, with financing and investment becoming increasingly scarce. Advertising revenues therefore represent an opportunity to secure sustainable profits in a relatively short space of time.

• Stabilize profitability: after a good year in 2021, Revolut recorded a loss of 29 million euros in 2022. The company's valuation has been impacted, dropping from $33 billion to $26 billion according to the start-up's latest valuation in December 2023. Its aim is therefore to generate new profits in order to return to stable growth.

• The ambition to become part of users' daily routine: The launch of advertising on the app bears witness to the neo-bank's long-term vision. It wants its application to become a daily point of passage for users, in a similar way to social networks or an e-mail inbox. The launch of targeted advertising therefore makes sense in Revolut's strategy.

MARKET PERSPECTIVE

• Revolut is also pursuing its strategy of service diversification, particularly in the area of travel. Following the launch of several integrated services, the company announced the launch in March of an eSIM offer for customers in the European Economic Area. The expansion of banking services into telecoms is attracting neo-banks looking to diversify, as just a few days before Nubank (a Brazilian neo-bank) announced it was becoming a mobile operator.

• Revolut's expansion outside Germany remains particularly strong. The company announced that it had passed the 40 million user mark worldwide. This was also an opportunity to reaffirm its determination to compete with online banks such as BoursoBank and to become a main bank for its users.