- After a year in which the pandemic upset the strategies of the neobank, Revolut and Starling are showing signs of a shift from survival to growth.
- Revolut sees promises in the US market and Starling forecasts sustained demand for business relief loans.
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The coronavirus pandemic arrived in the UK just over a year ago, confusing the strategies of neobanks and forcing them to cut costs and consolidate revenues. But after a year of unrest, two of UK’s most prominent neobanks see signs of better days ahead, Financial Times says reports.
Revolut sees promises in the US market. The neobank originally planned to campaign for customer acquisition in earnest last March, but put those plans on hold with the onset of the pandemic. Now Revolut has announced that it will launch an aggressive marketing blitz in the United States as it works to reach a goal of 1 million customers in the country by the end of the year, Financial News reports.
And this is only on the consumer side: the neobank too launched business accounts across the United States at the end of last month. Another sign that Revolut is playing the long game in the US, it has also applied for a US banking charter that would give it more flexibility to strengthen its deposit solutions and expand into lending products at a fraction of the cost.
Starling forecasts sustained demand for business loans. Over the past year, the neobank has relied heavily on the demand for relief loans through the government-backed Coronavirus Business Interruption Loan (CBILS) and Rebound Loan (BBLS) program. British.
He has accredited in April for CBILS and in May for BBLS, then I accept BBLS loans from non-clients for a longer term than other lenders. The tactic paid off: Starling reached 300,000 business accounts in March – a huge jump from the 74,000 it had in 2019 – and benefited from a trail of profitable months. And while it may need to design a long-term lending strategy independent of emergency relief loans, it may be able to continue to ride the wave of demand for relief loans for now.
British government launched the country’s next stage relief loan program – the Stimulus Loan Program (RLS) – yesterday. Research conducted by Starling in partnership with Enterprise Nation indicates that 70% of small business owners who took out a BBLS loan would also consider applying for an RLS loan, through AltFi. Although Starling is not currently an RLS Accredited Lender, it is in discussions with government regulators to get accreditation and think it will be able to start accepting applications soon.
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