$ 1.7 Billion Startup Revolut's Banking Projects Face Difficult Cultural Issues

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Revolut, the young British fintech "Unicorn", will probably face tough questions from regulators about her internal culture when she will apply for a banking license, experts say.

Wired magazine published an article last week about what he called "the human cost" of Revolut's rapid increase. The story details the people to whom it is asked to work for free in the context of job applications, excessively long hours, a culture of "achievement of goals to all price "and a high staff turnover rate.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Revolute pushed back, insisting in a blog post Nikolay Storonsky , CEO and founder, told Yahoo Finance UK in an email that "the allegations in the media last week do not accurately reflect the company we are today. ""data-reactid =" 24 "> Revolut reacted by insisting, in a blog post, that he had already answered the questions raised in this article.The CEO and founder, Nikolay Storonsky, told Yahoo UK Finance in an email that "the allegations in the media last week are not a faithful reflection of the company we are today. "

But the latest employee ratings on the Glassdoor website suggest that there may still be work to be done. Compliance and regulatory experts with whom Yahoo Finance UK has been interviewing also said that the UK's Financial Conduct Authority (FCA) would probably apply increased surveillance to the culture. of the startup in the light of the report.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""Culture is extremely important for the FCA, "said Gillian Roche-Saunders, a partner at Bates Wells Braithwaite Law Firm and Compliance Officer. "data-reactid =" 26 ">" Culture is of paramount importance to the FCA, "said Gillian Roche-Saunders, a partner in the Bates Wells Braithwaite law firm and chief compliance officer.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""Will the sum of the elements proposed by the proposed management team actually be delivered to meet the objectives of the CFA? That would be an issue anyway, but in that context, it would really be part of the process, "said Roche-Saunders."data-reactid =" 27 ">" Will the sum of the parts proposed by the management team be able to deliver in order to meet the objectives of the FCA? That would still be a question, but that bottom would mean that it really is being at the forefront of this process, "said Roche-Saunders.

Revolut is one of Britain's most popular startups. Founded in 2015 by a former Credit Suisse currency trader, this card was originally an application-based prepaid card that allowed people to buy ultra-cheap currencies. It has spread to everything from insurance to cryptocurrencies.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The startup was valued at 1.7 billion dollars (£ 1.2 billion) last year and raised funds from leading venture capitalists in Europe and Silicon Valley. Revolut has 3 million users worldwide and opens thousands of new accounts every day. "Data-reactid =" 30 "> The startup was valued at $ 1.7 billion last year and has raised funds from the largest capitalists in Europe and Silicon Valley.Revolut has 3 million dollars. Users around the world and opens thousands of new accounts every day.

Revolut currently operates in the United Kingdom with an "e-money" license, but the company wants to obtain a full banking license in the country. She is already licensed as a bank in Lithuania and is currently recruiting someone to lead efforts to obtain licenses in the United Kingdom and the United States.

However, the start-up suffers from what The Drum marketing magazine has described as a "public relations crisis" after recent press reports questioned its advertising techniques, sanction control systems and its internal culture.

While The Telegraph's sanctions control problems are perhaps the most serious, Revolut has reacted strongly in an article published on its blog. Revolut said that it was simply testing new systems and that no laws or regulations had been broken. FCA told Yahoo Finance UK that she was talking to Revolut to "understand and evaluate the issues raised by the article".

Yahoo Finance UK experts said that the culture issues raised by the Wired article could be a point of disagreement for regulators when it comes to signing bank applications.

"To be a bank, you end up having to change your culture," said Sandra Quinn, founder and director of The Compliance Foundation, at Yahoo Finance UK.

"Revolut, the perception is that they are actually very different and they try to do things in a very different way. I think the process of becoming a bank will probably require them to naturally grow and make them want to evolve. Success is all about evolution. "

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Revolut rejected the claims of a toxic culture Storonsky, CEO of the company, said in a blog post that although "we Revolut is "not the same company we were 12-18 months ago." He said the staff turnover rate was only 3% and Revolut "will share its plans for culture and well-being in the coming weeks. . ""data-reactid =" 38 "> Revolut rejected the toxic culture charges Storonsky, CEO of the company, said in a blog post that although" we have not always done things right " Revolut is "not the same company" as we were 12-18 months ago. "He stated that the staff turnover rate was more than 3% and that Revolut" share our plans for culture and well-being in the weeks ahead. "

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""According to the media, we are a sweatshop of tribal employees and submitted bent and chained to our office, working tirelessly on weekends on the direct orders of our founders, "The chief data scientist of the company wrote in a blog article Medium. "If you seriously believe it, I'm not sure you should be on the Internet. ""data-reactid =" 39 ">" According to the media, we are a sweat-shop of tribal and submissive employees, bent over and chained to our office, who work tirelessly during the weekends at the direct orders of our Founders, "according to the company's data, a scientist wrote in a Medium blog article:" If you seriously believe it, I'm not sure you should be on the Internet. "

The story continues

However, the latest reviews posted on Glassdoor, the website that allows staff to leave anonymous reviews of their employers, suggest that there is still much to be done.

Revolut is rated 4.2 out of 5 on Glassdoor. Since the publication of the Wired article, twelve five-star reviews have been published, including eleven on Sunday, March 3.

However, reviews prior to the publication of the article suggest a more contrasting picture. Several comments draw attention to issues related to intense work schedules and high goals.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The one that was posted on February 28th is complaining of "people working crazy hours to respond to unreasonable KPIs [key performance indicators] set by management. " Another posted on January 30 said:This is not the place to value your mental health or work / life balance. In the past year, other people have complained about culture and work-life balance."data-reactid =" 48 "> A person posted on February 28th is complaint of" people who work insane hours to respect unreasonable KPIs [key performance indicators] According to another post published on Jan. 30, "This is not the place for your mental health or work-life balance." Other people in the last year have complained about culture and work-life balance.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Twitter user @syswarren also tweeted a photo of a push notification that she received March 5, in Revolut, asking him to post an assessment of the application on Trustpilot to help the person "not to get fired." In the Wired article, a Slack message sent by Storonsky to last spring said that staff members would be "dismissed without negotiation "if they were too far from the objectives set."data-reactid =" 49 "> The Twitter user @syswarren also tweeted a photo of a push notification that she received On March 5th, in the Wired article, a Slack message sent by Storonsky last spring announced that staff members would be "fired without being fired." too far from the goals set for them.

Several fintech industry players told Yahoo Finance UK that Revolut had a reputation for having a high-charge culture that raised eyebrows elsewhere. Four people independently compared the start-up to Uber and his former CEO, Travis Kalanick.

"You have a Travis Kalanick – Russian version – who wants to build a regulated business and do it faster, better and bigger than ever," said a London venture capitalist who did not want to register.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""I am the first to admit that our culture is a constant journey, but we have come a long way in a very short time, "Storonsky told Yahoo Finance UK in an email."data-reactid =" 52 ">" I am the first to admit that our culture is a constant journey, but we have come a long way in a very short time, "Storonsky Yahoo Finance UK said in an email.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""The culture comes from the top down and I am committed to showing that these claims do not reflect what we are today. In the future, I will publish our cultural roadmap so that people can have a real-time view of the initiatives we will be presenting, but also to give them an idea of ​​what it's like to work at Revolut today. 39; hui "."data-reactid =" 53 ">" The culture comes from above, and I am determined to demonstrate that these claims do not reflect who we are today. In the future, I will make our cultural roadmap public, so that people can have a real-time view of the initiatives we are going to present, but also to give them an idea of ​​what it means to work at Revolut today. 39; hui. "

Long working hours and ambitious goals can be the norm in the banking sector, especially in the investment banking sector, where Storonsky and his co-founder are from. However, as a result of the financial crisis, regulators have become increasingly concerned about culture in banks, realizing that poor cultures can often create compliance problems.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""[The FCA] Ask questions that try to understand how things work in practice, the compass that basically governs the firm, "said Yahoo Finance UK Roche-Saunders, Compliance Manager at Bates Wells Braithwaite. "data-reactid =" 56 ">"[The FCA] Ask questions that try to understand how things work in practice, the compass that basically governs the firm, "said Yahoo Finance UK Roche-Saunders, Compliance Manager at Bates Wells Braithwaite.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""How do executives really set the tone and also ensure that, in the lower ranks, everyone acts according to the ethic of society, which should not be just a growth"data-reactid =" 57 ">" How do executives set the tone and also ensure that, in the lower ranks, everyone acts in accordance with the ethics of society, which should not to be growth only? "

The statement that Revolut sets ambitious growth targets – key performance indicators – could be problematic.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""It's always a challenge for financial technology companies who want incredibly fast growth, "said Roche-Saunders. "Is there literally enough margin to run the business and to meet all the regulatory requirements?"Data-reactid =" 59 ">" It's still a challenge for financial technology companies looking for incredibly fast growth, "said Roche-Saunders. Is there enough room, literally, to run the business and to meet all the regulatory requirements?

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""For the most part, the business model must support FCA's specific objectives, including consumer protection and market integrity. ""data-reactid =" 60 ">" The business model should in principle support FCA's own objectives, including consumer protection and market integrity. "

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""I've recently announced in-house enhancements that, in our opinion, will make our processes first-class in terms of commitment to employment! These include a redesign of how we manage new talent, talent retention and performance management, "Storonsky said in an email."Data-reactid =" 61 ">" I've recently made internal announcements regarding improvements that we believe will make our processes first-rate for engagement with the company. employment! These include a redesign of new talent management, talent retention and performance management, "Storonsky said in an email.

Quinn, director of The Compliance Foundation, said the company's recent "public relations crisis" could actually be a useful incentive for solving problems that could become even more important in the future.

"The more your head starts to pass the parapet, the more things that happen, and the more people 's expectations are great because you' re having a great, great app – that 's new, that' s it. is a brilliant addition to my life – to: I really rely on that, "she says.

"It's this change in expectation that I think is essential for consumers and public perception, and it's clear that regulators are also paying attention to that."

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""In some ways, getting that kind of focus really helps you change. It probably does not feel like that at the moment, but it's almost useful, "said Quinn."data-reactid =" 65 ">" In some ways, getting that kind of attention really helps you change. It probably does not feel like it at that time, but it's almost useful, "said Quinn.