The Revolut PR crisis timeline: is the 'future of banking' hanging in the balance?
In the past few months, fintech app Revolut has faced off accusations of ad theft, fabricating data, having a money laundering loophole, of cultivating an exploitative workplace culture and most recently misplacing a £70,000 money transfer.
The fintech start-up was founded by Nikolay Storonsky and Vlad Yatsenko in London in 2015. The 'digital banking alternative' enables cash transfers without hidden fees and has attracted $332m investment since it was launched, with $250m accruing in 2018 courtesy of investment from DST Global.
It boasts a $1.7bn valuation and breached three million global users in November.
However, the past two months have been among its most challenging, facing one crisis after another following its biggest ad campaign which recently ran in London.
January – Spotify copycat ads
In January, Revolut plastered the capital in out-of-home ads with introducing the start-up to the public as it tried to expand its userbase.
With this campaign, it was accused of blatantly plagiarising the two-year-old, award-winning, data-centric creative from Spotify which highlighted the quirky listening habits of its audience (pictured above).
One Revolut ad read: 'To the 7,643 people who set a monthly food budget called "Brexit Survival Fund"... hang in there'.
Spotify's stated: 'Dear 3,749 people who streamed 'it's the end of the world as we know it' the day before the Brexit vote... hang in there.'
Alex Bodman, global executive creative director at Spotify, told The Drum: "Some of our favourite songs on Spotify are cover versions, so who are we to judge?"
Revolut said it would take down the ad in question but others continued to run. One mocked people for buying meals for one on Valentine's Day: "To the 12,750 people who've ordered a single takeaway on Valentine's day, you ok, hun?"
But accusations of 'single-shaming' were the least of Revolut's worries as it faced further repercussions from the campaign.
8 February – Fabricated Advertising Data
On the back of the work, the fintech firm was referred to the Financial Conduct Authority (FCA) for fabricating user spending data.
Revolut said the ads were "spoofing" the Spotify campaign and admitted that the figures were “just made up”.
Unlike Spotify which has an intimate view of listener habits, financial transactions are protected and are much more difficult to leverage.
Revolut would know when and how much a user spent, but wouldn't have access to product orders or the consumption orders. Furthermore, questions arose whether it was appropriate for a bank brand to be so flippant with banking data.
12 February - Links to Russia?
Following the advertising blunders, chief executive Nik Storonsky of the fintech start-up was then forced to deny that his company had links to the Kremlin after being called out in Lithuania.
Lithuanian MP Stasys Jakeliūnas made the comments after the company secured an EU banking licence in the nation.
Revolut's Lithuania application, steered by its Russian founders, was, according to the MP "an attempt to intervene into the political process here". Furthermore, he has expressed concern with the speed in which it was granted a licence.
The company has rubbished the notion that it acts on behalf of Russia.
28 February - Money Laundering Loophole
The tech startup was then accused of violating basic banking rules after falling short with measures that clamp down on money laundering.
The Telegraph revealed that the company, for three months (between July and September), switched off an automated feature designed to stop “dubious money transfers” – a move that could have enabled illegal money transfers.
Revolut responded, claiming that it did not turn off the feature but downgraded from the “more advanced sanctions screening system" which was throwing up false positives at the time.
It added: "At no point during this time did we fail to meet our legal or regulatory requirements."
28 February - Workplace Reports
On the same day, Wired exposed Revolut's workplace culture. The feature looked at how the app, which had accumulated 2.8m customers, "has come at a high human cost – with unpaid work, unachievable targets, and high-staff turnover”.
One job applicant exposed how she had been tasked with bringing 200 clients into the app to stand a chance in the next chance of the interview. Meanwhile, leaked Slack messages showed how chief Storonsky demanded staff with "significantly below expectations" performance ratings would be fired after a review. It was also details that he expected for staff to work weekends to catch up on workloads.
1 March - CFO quits
Revolut chief finance officer Peter O’Higgins resigned on Friday after three years, after the money laundering scandal.
He said: "Having been at Revolut for almost three years, I am immensely proud to have taken the company from £1m revenue to £50m revenue during this time.
"However, as Revolut begins to scale globally and applies to become a bank in multiple jurisdictions, the time has come to pass the reigns over to someone who has global retail banking experience at this level. My time at Revolut has been invaluable and I’m so proud of what myself and the team have achieved. There is no doubt in my mind that Revolut will go on to build one of the largest and most trusted financial institutions in the world."
Nik Storonsky said the departure "was caught up in the above recent media coverage on our compliance enhancement roll-out".
It was added: "Any suggestion that Peter's resignation is in any way, shape or form connected to this roll-out is utterly false and damaging. Peter has since expressed to me that he has been hurt by this suggestion and sad that his departure has been tainted in this way."
5 March - False City of London Police investigation
The FT reported that a fraud complaint was passed to the Metropolitan Police, blaming Revolut for a misplaced £70,000 transfer.
Complainant Paul Carlier, a former foreign exchange trader, said his wife still has not received a payment which was supposed to be in her account in January. The sum was reportedly paid into the wrong account. The family claimed the financial service had been ignoring them.
Revolut responded. It told FinTech Futures that the payment had been sent to the wrong account from a non-user and as a result it never reached its ecosystem.
It denies any responsibility for the misallocation of funds as it never received the sum, but added that it is working with partners to redirect the payment. The FT piece alleging that an investigation was underway from police had later been deleted.
In order to get the brand back on track, Revolut issued a push notification to its loyal users. Product Hunt head designer Julie Delanoy shared a screenshot of the app courting TrustPilot reviews on Twitter.
The notification was named 'help me not get fired'.
The PR Response
Nick Bishop, head of corporate strategy at Golin said: "The reason we like start-up banks, such as Revolut, Starling and Monzo, is because they’re not ‘banks’. The immorality so much associated with the culture of big banking is not the culture of the start-ups. But what Revolut has done in swift time is prove they’re no better than their big banking peers.
"If Revolut hasn’t yet sunk to the lows of big banking, then it’s certainly knocking on the door. Their aggressive ‘win-at-all-costs’ culture will not endear them to the millennial generation, whose approval they so desperately need. Nor will it endear them to investors whose confidence will unquestionably have been knocked."
He concluded: "Now is the time for Revolut to follow the lead of that other start-up bad boy, Uber, and let the grown-ups in. My opinion is that they must invest in culture, beyond a Ping-Pong table and free bar, and put integrity at the heart of its business."
As it deals with yet another PR crisis, the question now being asked - as it edges towards an IPO can the brand recover and retain its $1.7bn valuation?