Ep. 44 London as a Launchpad: Revolut’s global HQ and UK banking vision

Hello and welcome to the Revolut insider podcast where we bring you all things Revolut one episode at a time. I'm your host Alex Carill and joining me today is Revolut's UK CEO Francesca Carlesi. This is where our roots are and I like to think that like every night if you want to grow a lot and grow far and go far you need to have strong roots and lambda and ND UK is proven to be a country that's very stable recognition of talent capital and technology so I think it was obvious. Thank you for being here I know that you're very busy as Revolut's UK CEO and I think that there's a big congratulations in order for you. Yes I think you're really spot-on we just launched the bank so this has been something in the making for a while and very very excited. And I do want to get into all of this in just a bit but before we get into that we are here at Revolut's new global headquarters in London the middle of Canary Wharf. Tell me about this space. Yeah well first of all I have to say it's a fantastic space is a hundred thousand square feet on four floors with all potential amenities you can imagine from food to collaborative space create spaces and even a gym. Yes so it's fantastic and I think the way I look at this is not just a place to work is a space really where people and teams we can collaborate create and also enjoy life a bit so it's thought in a futuristic way. Collaborative space but focus space and productive space. Yeah you know a while ago Nick had mentioned that we were doubling down on hybrid work on remote work but what does this new office? What message is it sent to employees? Yeah I'm very happy to talk about it so and I will say two things right one is absolutely a Revolut we have a philosophy of flexible working, hybrid working and I hope there's never gonna change so I was very pleased here Nick keeping the view. What matters of Revolut is what you do what the outcomes you deliver not the process so you have maximum flexibility to work one you want from wherever you want which is something that I think is where the future is going so in the future you know it doesn't really matter where you are but if it is all about what you achieve right and this is really paramount the Revolut and having now from my side I've been worked in the industry for many many many years I think it's a very strong distinguishing factor to hire high potential not performing people in the future so this should never stop and I think you know in the past a lot of people talk about work life balance I don't think that's a war anymore for me it's always been about flexibility and that's what Revolut really truly believes in and I think is really distinguishing for especially for young people. At the same time we do have fantastic office and it's great it's been a big investment I think that is recognizing the fact that we value the work that people do and then you make available a space that is you know fantastic if you want to be here when you have to collaborate when you want to create you don't have to compromise you're the best of the best so I think these two things which I know could feel like a little bit conflicting in reality I think they are given experience as probably the best is in the market that way. Yeah they work together and I think that especially in a time where in a lot of companies a lot of tech companies even are moving to go back into the office but to have this opportunity where we are still remote but if you want to come into the office you can you have that ability. Yeah why London why set up the global headquarters in London? I don't think that's very simple this is where Revolut was born this is how home and it's not gonna change you know it's very difficult to change we are DNA or where you're born right so it was not even a choice was really not even a debate right this is where our roots are and I like to think that like every now if you want to grow a lot and grow far and go far you need to have strong roots and London and the UK is proven to be a country that's very stable they combination of talent capital and technology so I think it was you know obvious. It makes sense yes. Any honestly it does reiterate our committee to London to the UK as a company not only into what we do locally most of us being the springboard for us to grow globally. Tell me about that what how does it strengthen our presence in the UK? Well I mean we were we always had our office in the UK right so let's I mean the UK is still our single largest market still a market that is part of being very mature grows very fast and is still where everybody knows Revolut so where we have established grand established reputation a very big customer base. I think this office has made Revolut even more visible but I think it also the combination of the office plus the banking lasers and fewer things you're launching here has elevated yes Revolut sits now in terms of the overall financial service environment right I think it used to be that you have incoming banks all the ones that he had calorie war through the big logo on the building and then tech startups which are typically smaller sitting like somewhere in Soho on short bridge where they would serve mostly earlier doctors and right now they're not there anymore the waters moved on right these two worlds are converging and I think the office here in Carnegie War for the big logo Revolut on top of it demonstrate that the future is about tech driven financial services and that's what Revolut is leading the way on. You mentioned this keyword which I love which is elevated and I think I mean not only literally and elevated this building and gorgeous global headquarters but now that we're a live bank in the UK what does this mean for customers here and Revolut globally? Yeah well for customers here is a fantastic news it means mostly two things first we can offer more products than we're able to offer before and probably satisfy any financial needs or anybody ideally we would like customers to think and Revolut as a primary bank not just as a transactional card and this is a must-eat shipping this is the core pillar and a core goal of our strategy here in the UK. The second part is about trust as well which is as a bank people can feel that we are subject to the same regulatory scrutiny the same controls and same compliance of any other bank so they can feel safe putting their money with us. Exactly. I think more globally what that means is also actually very impactful because UK being our home market and being our global headquarters means that we are a banking group globally. Which is really this concept of being a truly global bank we've been talking about it for years and years but you know recently we're starting to hear this term banking and beyond tell me about that. Okay I really like that right away and I think that is again one very good representation of how we think bank is going to change in the future this for me is really laying the way for the future so banking beyond means that we don't think banking anymore it's just this of your life that we need to that we are focusing on we think the lines of blurring right in our life is more about customer lifestyle and what they need to do and we are there to support them and so banking is more a means to an end rather than an end to itself. Let me give an example and it sounds very philosophical so think about travel right that's where level of service when you travel you need to exchange currencies so that's why you have effects products you need to make payments and so on but you typically also need to have an easy to switch your telephone plan because that happens to me all the time and so that's why we launch it because at the end for us what doesn't really matter whether something is labeled as a banking product or not what matters is the customer experience what they need to do and we are there to help them to build that. And I think that's how the future will be the future will be much more customer centric and looking what you need to do and then we want to be there to help every customer. Yeah and I think that's the way to win I think when all of our decisions are so customer centric I think that's when we're in a position not only to win in the market but also in a creative space for ourselves as employees like want to do something great for people. Yeah absolutely changes customer's life right and everybody's life and and I think now we can we can do that with technology with data and it was not possible a long time ago that's why the world was broken down into banking or banking so so we want to go beyond banking but clearly one step at the time. Do you think that not being a fully live bank let's say was holding customers back before from kind of committing to being a primary bank? Well I think for sure when we even you know in the past when Revell was not even a bank right it was mostly licensed as a E-man institutions I would say absolutely yes for two reasons one that we were restricted to so the type of products we could offer so by design customer had to have another bank if you want to get the loan of the investment product so once you kind of by design you can also serve all your needs with Revell you will have another bank so inevitably one that will become primary and typically the one when you can do direct debt it becomes your primary one. Exactly. Absolutely I think that was a structural issue which is why we wanted to now go through this journey and become a bank. Then the second reason why I was holding customers back is that there is still a trust aspect about banking and trust is important financial services from a customer standpoint having the regulatory approval of being a bank gives a sense of trust and security that it's a matter when you make your financial choices. Do you think we still have an advantage over legacy banks? Yeah absolutely I I think we have much more. That's why we're really excited about what lies ahead. Because what we have today is that we have a customer base that is as big, if not bigger, in some cases, of all the incumbent banks. And typically that's been a source of company advantage for incumbent banks. But at the same time, we are combining that with a leading technology capability and innovation mentality, which legacy banks don't have and is super difficult to build it from within. And I mentioned this because I've tried, actually, it's been a half of my life, in traditional banking. And I want to realize is that the hurdle to innovation and doing what Revelo is doing, is partially the legacy technology. A lot is the mentality and the centi-structural, so effectively, you have no reason to innovate. And what Revelo is about is continuously innovate. And that's where the world is going. The future will look very different. So I think about my sons, my kids, they've never walked into branch. And I don't think they will ever know what a branch is. So we have the privilege and the luxury to have started without branches. And so we can really focus on the future. Rather than having to manage the legacy and justify why is this relevant or not relevant. I think that you're right in that, because I think a lot of times these legacy banks we hear that they don't move fast enough. Or they are so stuck in their ways that they, it almost prevents them from being innovative, right? So I think that having that already in our DNA allows us to just move faster and outpace them. No, absolutely. We should not lose that. It's very difficult, as you scale. And many organizations tend to become more corporate and maintaining the right tension and healthy tension between the innovative DNA and the banking requirements and controls is what is a source of unique and unfair, then, I think, for Revelo. And let's turn the tables for a moment. Yeah, yeah. And let me ask you, Francesca, where do you think that traditional financial institutions might still have an edge over other fintechs or revolute? Well, I think we need to be honest, right? And a lot of the legacy institutions have a long history and Revelo has been around since 10 years, which has been, a lot has been achieved in 10 years, but it's a very small period of time compared to other banks. So we are still building that path and that trust. And definitely now that we are a bank that will help us a lot. We are working on this, and it's important to know what to work on. Yeah. And so how do you work on this? Because the idea of trust is abstract. So how do you measure something? How do you tell what the trust is in the market toward Revelo. Yeah. So measuring trust is very difficult. Although we do talk a lot to our customers, we do monitor what they tell us. We do receive feedback and we really value that and then act on it. So that is the main thing we're doing, to sense where we are in terms of the trust. But then how do we build it? I think it's like people, right? So trust boils down to first building an environment that is secure and we give the best in class controls and safety around everything customers do here. Number two is about consistency, consistency of behavior, making sure that in those moments of truth, when something happens, like if there is a problem or somebody loses their car that we are there, and we are actually better than incumbent banks in helping them in those moments of difficulty. And then third one is, no, disappoint. And when you can have built all of these and then overnight you can lose trust over a person. Is that correct? Yes. And it's the same here. So we're really, really careful not just to be great on average, but to be great in every single moment and in every single moment of truth. It is important because you mentioned you work for years to build up someone's trust and then in a split second you can lose that. So how do you maintain that over the long term? And I think that's what we're doing. So I think you need to really think about every single customer, not just the own average or every single experience, especially the worst experience that you don't control. If we lepping a certain point of payment doesn't go through or it will happen there is a fraud, but then how you react, how present and fast and responsive you are to the customer, goes a long way to really build a relation and goes beyond the single transaction. And for just, I'm excited to know, and I'm sure a lot of people are, what new features can customers in the UK expect now they're alive as a bank? That is probably the most exciting part of what we're doing. A lot of new features, new products. So as I mentioned before, we, being a bank allows us finally to offer customers all what they've been asking for the last few years so that they don't need any other bank. So our goal is really become a primary banking partner for everybody and at the end nobody should need anything else. What that means is the most interesting and exciting one that I can talk about. It's a program couple, so one is lending. So we are going to launch personal loans, credit cards. And maybe even more later on to serve customers, young people when they need it. And then investment products. Investment products are really, really important. It's really important today. Things even like cashisers or fixer and savings and many other ideas that we are ready to go. And then later on we want to start giving more tailored experiences for customers to have a different profile, like private banking customers and so on. That's where I need to stop. But probably there will be much more happening in the next few months. And as we continue to roll out these new features, we need more people because we're growing. With this commitment of hiring a thousand new employees over the next few years to Revolut for you, Francesco, what does it mean to lead a team here as the UKCO? Well, I think that's a crucial ingredient for any company and any venture of any success. So people in the team is the core, really, of what we do. And actually it's probably the most exciting part of my job. If I need to be very honest, right? I love that. And I love the fact that we have a lot of young people that come to Revolut and they grow in their career. And at Revolut they find the springboard for future growth. What that means for me and what matters for me is a couple of things. So first, everybody wants to be part of a winning team. So having a high performance organization and a great brother and a great company really helps. We attract so much attention, so much talent that is a privilege, honestly. But then clearly, once people are in the team, what matters for me is a couple of other things. So in what really distinguishes Revolut, second is the ability to give people opportunities and empower them to take ownership since they won. Now, it's really me, it's very rare, especially in big banks or big organizations. In reality, Revolut, no matter if you join as an intern or you join as a graduate or you join ten years afterwards, you are given a lot of responsibility and a lot of that exposure. With the opportunity to make an impact, to have an impact. To make an impact. Yeah, and that matters a lot. And then clearly there is support and coaching, right? So it's about willingness to support and coach and ensure people have opportunities for growth. Which also happens a lot here Revolut because you can start in a department, but then effectively move to another department. You can experience from being a product owner to be a compliance manager. And I think that's also unique. So these are the three critical ingredients for me. What I appreciate about Revolut too is this culture that we have that is quite linear. We have this flat structure where we can reach out to people to have these mentoring opportunities to see how people are interacting with their team. Learn from experience. And I feel like that encourages people to reach out to the UK CEO. I think it's critical. And people often, I think in big cooperation, underestimate the importance of that. So Revolut, we do have a very flat organization. There's no hierarchy. It doesn't matter whether you just join as an intern or just a global CEO. Everybody is the right to say the opinion everybody is listening equally. And there is even from an office structure point of view, there is no difference. It's a game changer in terms of how people interact and work. The ability to ask questions, the ability to shape their own opinion without expecting as somebody will tell them what to do. Exactly. It's a completely different culture that then makes everybody feel that they are in charge and develops a lot of being entrepreneurial spirit. Yeah, you want to try. Having that real ownership spirit, because you are part of something bigger. Yeah, absolutely. Maybe that's why that a lot of people leave Revolut and set up their own company. Because this is a great testing ground, and you're learning ground to them be able to do it. But that's also fantastic. And it's fantastic for the UK ecosystem. I think there are more than 55 new tech companies out of the Revolut alumni. As well now, probably we'll keep growing right? I'm sure. I think two are already unique. So that's fantastic. There's a contribution to the UK economy and the ecosystem and the technology talent pool. And how did you find yourself in the financial services industry in the first place? Well, I was by chance. However, I did spend our first part of my life in the really more traditional financial industry in banks. Even since my university day, because I graduate in business, but then started doing specializing in banking and finance. Did a PhD in banking finance? Oh, wow. And then started working in banking. So I think it's just kind of a very beginning. It's probably the common denominator of everything I've done till now. More recently before joining Revolut, I said I'm a company. I was a startup, which was a digital mortgage lender. So I'd explored this world of tech, the FinTech ecosystem, and went to the full rollercoaster of startup journey, which is fantastic. So at that point, a very few things you can do. You are the startup and other startup. Or you join a company that's like Revolut, that is a scalar. But where I could really uniquely contribute with experience before and my recent startup experience. Exactly. Can I merge these experiences together to take Revolut to the next level? Correct. Because of that, I probably became a bit more closer to the world of Revolut and different people. was approached for the role and that's a unique opportunity to shape the future financial services, leveraging the experience but also being open to the innovation and how it should be in the future rather than trying to do all these things out like in the past. What was the biggest change that you were like, oh this is different? Well you'd be surprised to hear that on day one I felt at home and there was a nut, like oh my gosh what's different here which was very surprising for me as well and I reflected, there's a lot of people who were asking me how is it different, I think it's reason is because I was coming from a starter which was my previous company which was kind of you know, it was 100 people so it was not that small. Coming here the culture of DNA, the ways of working, well very very similar to what I just left. So I felt well that's just a bigger start off which says a lot about the DNA and the mentality and the culture right so I couldn't point to anything and was particularly particularly different which is really unique. Well we're really lucky to have you and your experience. Thank you. Looking back at your career, what advice do you think you would have liked to hear when you were younger? Well a lot of advice but one of all probably comes to mind don't be afraid and take a little bit of risk and when you face with a choice always think would I regret it later so this call it a no regret rule right so instead of thinking what risk I'm taking for today's always think what if I don't do it and what will I regret in the future and that is a great guidance for making choices, making the right choices, they're more consistent with who you are in in China so that I highly recommend to everybody. Let's take a little bit of risk. It'll pay off in the end. It will pay off. Yeah well friend Jessica thank you so much for being here to say and talking with me about what this next chapter for Revolut looks like now that we are live bank in the UK. Thank you Alex thanks for having me and look forward to what's next. Yes we're just getting started. Absolutely. 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