Blue oceans for banks

No doubt. Where does the assumption come from that banks aren't aware of this market. And how on earth does one compare near lawlessness of Facebook with the most heavily regulated sector of banking. Lastly, is the author completely unaware that not all business models try to maximize "eyeballs", or customers and that some attempt simply to maximixe revenue or profit.

Yes, Virgin Money does a range of retail financial products. Their residential and buy to let mortgage offerings are based on their 2012 purchase of Northern Rock from the British Gov't. Northern Rock collapsed during the 2008 financial crisis due to the poor quality of its loan book and loss of access to wholesale money markets. Borrow short and lend long to sub prime borrowers turned out to be a bad strategy! I've just come off a year long contract working on the mortgage origination software Virgin Money inherited from Northern Rock. If I learned one thing it's this: the UK mortgage industry is technologically stone age!

You misunderstand me....

You can think of revolut as a front end for barclays client pool account. This is a very simplistic explanation but what I'm trying to emphasize here is that the money revolut manages is effectively with Barclays.

So the idea of having Barclays is not to get traction or to have their own participation method later but to have the muscle of a bank that can handle large scale international payments.

There are other big banks who don't have something like revolut. So our solution can be a good proposition for them (Not saying that we don't have ideas for any new features. We do, but we've been caught off guard by the new announcement. It'll take a few more days to make it's way to the pitch)

>"Barclays has been known to help startups by lending them their (global) infrastructure in the UK"

Yes, but why? Barclays profits with every customer that revolut brings/ will bring. Other banks would want to profit in a similar way.

I didn't know about BOE but I don't think that switching banking partners after about 5 years of operation is going to be that easy... Not sure could be wrong.

The paper contains a lot of bullshit and I don't see any new idea in it.

Foreign transaction costs are not "prohibitive" expensive and there are CC in the US with no foreign transaction fees. You can use transferwise or WU in the worst case (just wired a buddy who is broke US$ 300 online). Social network and payments? Use Wechat!

There are three major problems that they won't be able to solve.

1. KYC regulations

2. Fraud. The financial industry makes it more difficult and more difficult to access your own money (e.g. require a receive text message to wire money. Good luck with that abroad)

3. "in multiple currencies and fast unrestricted exchange of funds within the internal banking network"

This is not a problem as long as your stay within ONE country. Use Wechat in China, use M-Pesa in Kenya etc. It becomes a problem when you do it internationally because many countries are heavily regulated and afraid that capital leaves the country. Have you made, as an average person, international transactions with China? India? Sri Lanka? Ethiopia? Good luck buddy!

In fact, even getting cash at the ATM abroad becomes more tricky. Recently I got into the habit of just carrying cash for all my travels after I run nearly out of cash twice (Ethiopia and India). What do I carry? Euros! They did not want my dollars in Ethiopia because they were "not the latest series" (remember point 2?)

I tend to agree.