Revolut launches expense management tool for companies

Challenger bank Revolut is expanding its footprint in business banking with a new product for expenses management.

Revolut Expenses gives business customers a view of their finances through real time spending notifications, limits on outgoings, control over company cards, and features for employees to submit expenses forms.

Many of the processes are automated, such as digital receipt filing for purchases and expenses made online and smart tech for reading paper receipts automatically to cross reference them with expense reports.

The new product also comes with features for managing repeat expenses and organising them per category, such as travel costs.

It is aimed at small and large businesses alike as well as freelancers.

For bookkeepers and finance managers, the automated features will reduce many of the manual hours spent totting up numbers while business accounts on the app can be linked with Xero for further accounting and finance management.

“We have built our Expenses product to simplify everyday tasks for business owners, employees and accountants alike,” James Gibson, head of product at Revolut Business, said. “Regardless of whether you are a freelancer, small business or future unicorn, our set of tools will provide you with control over your company spending – so you can focus on running your business.”

Revolut’s launch of Expenses further expands its offering for business banking customers, an important segment of its customer base that pays to use the product. It is premium features like these that Revolut and others are turning to in order to reach sustained profitability.

Its rivals like N26 also push business products to generate more revenue, while in the UK Starling Bank has amassed around 300,000 business banking customers out of its 2m total. Business and expense management focused fintech start-ups have emerged in Europe in recent years as well, such as Soldo and Pleo.

The post Revolut launches expense management tool for companies appeared first on Silicon Republic.

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Revolut sets sights on full UK banking license to solve the profitability conundrum

Summary List PlacementThe UK neobank applied for a full banking license in the UK, which would allow it to offer overdrafts, loans, and deposit accounts, Bloomberg reports. The license would also guarantee Revolut is covered by the UK’s Financial Services Compensation Scheme, which protects customer deposits of up to £85,000 ($109,000). Revolut currently has an emoney license in the UK, holding customers’ funds in big banks, and a banking license in the EU.

This mirrors a trend in the US, where fintechs are seeking more operational autonomy via banking licenses. In 2020, Varo became the first fully licensed US neobank. And later in the year, Square obtained FDIC insurance, and SoFi received preliminary Office of the Comptroller of the Currency (OCC) approval for a bank charter, pushing them both a step closer to bank charter eligibility.
A charter from the OCC enables nonbank financial services firms to expand their range of products and eliminate the costs of partnering with a sponsor bank to hold the deposits, which could be particularly beneficial as the pandemic has diminished the use of physical branches and digital banking penetration is on the rise.
Revolut is betting that the license will help it unlock primary account status, which is a key driver of profitability—but a license won’t be a silver bullet.

A license could give Revolut users the confidence to increase their deposits and conduct more financial activities through the neobank. To lessen their dependence on interchange fees, neobanks are looking to become the primary bank for their customers’ day-to-day expenses, rather than just being used for their debit cards. Revolut believes the deposit protection promised with a full banking license would encourage consumers to do just that: In a survey, the neobank found that 50% of its customers would be willing to deposit their salaries in Revolut accounts if their money was covered by a deposit guarantee scheme. And CEO Nikolay Storonsky told The Sunday Times that a license will allow it to “compete with large British banks because [Revolut] will be providing better services at better costs with deposit insurance.”
Still, Revolut can’t rely solely on a bank charter to spur users to primary account status, and it should continue incentivizing primary account status in other ways. The neobank isn’t guaranteed success with its license application, and the process could be lengthy. In the meantime, Revolut should look to prime users to integrate more of their financial lives with its platform. It has already taken steps toward this by enabling early wage access for users who link direct deposit to their Revolut account. And it has broadened the platform’s capabilities, including with a subscription management feature and a Pockets money management tool. Continuing to build out its offerings should help Revolut ensure that its UK customers are engaged with the platform and therefore more likely to make it their primary account in the future, regardless of licensing status.

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