The Profitability Challenge for Challenger Banks

It sounds like the plan for a lot of these newer banks is to grow customer base selling services at a loss, then cross sell once they have a profitable offering (home loans etc).

I wonder how plausible it is that some of these mobile only new banks will never be profitable before they are acquired by existing legacy banks.

> While these challengers are successful in attracting large number of customers, many of them haven't quite yet made profit. Simultaneously, the larger the size, the more the losses.

I have seen this story okay out before. Startup basically grows base by losing money. Eventually they need to actually make a profit. Then come out all the dark patterns, selling of customer data, and other scummy behavior. If you are a customer of these banks be extra vigilant.

I think the challenge goes beyond just profitability.

I’m currently locked out of my Revolut account due to a bug on their end.

There is no telephone support and no in app support until after you are logged in. Apparently you have to contact them via Facebook or Twitter for assistance.

They are forever destined to be a toy with this kind of approach to people’s money.

Interesting anecdote, thanks for sharing. In contrast legacy banks would likely offer both mobile & internet banking (if you're locked out of one the other might still work) & phone support & perhaps nearby physical branches, depending on where you are.

I was locked out of my Revolut account too, for about a day.

I was able to chat via messages in-app. But each time I did, the support person asked me to upload photos of supporting documentation to prove my own other bank cards were in my possession, that sort of thing. I duly did so, and then there would be acknowledgement followed by silence at the other end for hours. Eventually the person would log off (their status is visible) and the system would show that it was "waiting" for someone to become available to handle my query.

That "waiting for someone to become available" would typically last some 6 hours or so.

Then I'd get someone, and we'd go through another loop, going nowhere, and them going silent on me.

I read somewhere that this can go on for a week or more, which had me really worried because I'd put in about £1000 just before they locked the account, which I needed sooner than that.

I also read that their Twitter and Facebook teams are much more responsive than their Customer Service.

So I reached out on Facebook. Someone replied quickly that they'd asked somone in Customer Service to deal with my query, and... my account was unlocked about 15 minutes later.

So, all credit to Revolut's Facebook team....