Revolut will start working Ukraine in 2020. But does it (and others) have chances for serious success here?
A couple of weeks ago new discovered that one of the most successful European fintech startups Revolut is planning to start working Ukraine in 2020. The decision is logical, given the pace of development of the non-cash segment in our country and the fact that we don’t have PayPal or other international fintech projects aimed at mass users. Perhaps the German N26 will do the same after Revolut.
All this. perhaps, will bring competition in the financial sector to a new level, and will make banking communication even closer and «younger». The key word is «perhaps». Many fintech experts have already managed to express their joy and active position. But I will be more careful and say: Revolut and the others will have to try pretty hard to enter Ukraine and “knock out” the audience from competitors. And here’s why.
High level of financial market
Those who call Ukraine a «banana republic» and financially backward country haven’t been to Kyiv for the past 5 years, they aren’t aware of the intensive development of fully (or partially) mobile banks and POS infrastructure.
Mobile banking itself appeared at the same time as it was in the USA, Great Britain and other leaders, and now it is at least not worse comparing to them in terms of penetration — and sometimes it’s ahead.
Non-bank fintech projects have also succeeded in reaching a multi-million audience over past 10 years of active development. The basis of payment habits — payments formobilephone and utility services, card-to-card moneytransfers — has long moved from cash desks to online. This is such an obvious story that creating a new service in this segment doesn’t make sense — the release threshold will be too high.
Mobile banks, of course, appeared later than ones in the most innovative countries. This is mainly due to regulatory issues and because of the serious financial crisis in 2014. However, recently the sphere with high expectations of the «first of its kind» has received such a project, which has become a leader due to it’s quality. Now others are trying to either «bite» some part of it’s customers, or expand the pool of their interests, motivating clients to become a customer of another bank.
Ukrainian business is the master of the «long siege»
When Uber entered Ukraine, many said it was an «Uklon killer». When Taxify came (now Bolt) — they said the same thing. As a result, after the primary hype from the Uber’s release passed, the quality of it’s service is started getting worse. Uklon, on the contrary, did a serious upgrade of the application and the working principles with drivers — and maintained its position thanks to several unique tools.
A quick and loud entry into the market of a famous large brand — yes, it’s beautiful. But a brand should have a service that confirms and strengthens its name in practice. In routine operational work, and this is not so much fun as quick hype thing in the media and social networks. As a result, large international startups had to reckon with the Ukrainian company, which withstood the «long siege» and passed the test of time.
This example is absolutely indicative for a transactional business. It’s not enough to be heard. You need to be able to listen to your customer and understand the specifics of the Ukrainian market. And for international brands, this is not a game on their own field, and obviously not an easy one.
Innovations areinvented or quickly adapted here
Not the most understandable thesis, mostly based on practice. Some Ukrainian fintech projects have learned how to make many financial decisions themselves or have successfully adapted a useful cases from Europe and USA. The main reason for success is flexibility. Ukrainian fintech is faster, more efficient and sometimes more aggressive, because it’s «hungry». It doesn’t develop themself thanks to, but contrary to the state efforts. It creates interesting marginal payment mechanics, because there is simply no other way out. Therefore, payments by card in Kyiv subway were among the first in the world, and Forbes in USA noted the functionality and design of the Ukrainian mobile bank.
Undoubtedly, the release of Revolut and its analogues in Ukraine is an excellent signal for the economy. They will gather a loyal audience among the upper middle class — and that’s cool. But reaching the masses won’t be an easy walk for them. Ukrainian fintech obviously won’t give up just like that, which makes the next couple of years as interesting as possible for all participants.