Revolut is the agile future of the banking industry.

Recent media criticism of the work culture of fintech start-ups misses the point; digital transformation makes old work cultures irrelevant.

Anyone who claims to know what the banking industry will look like a decade from now is exaggerating their powers of prediction. Banks and other financial institutions managed to absorb the early stages of digital transformation. But with a wave of new fintech startups and cryptocurrencies creating earthquakes for even the most established financial players, the future of banking is up for grabs.

In times of high-speed change, change itself becomes the rule.

When you can’t accurately predict the landscape ahead, the wisest choice is to put adaptability to change itself at the core of your strategy. In the age of high-speed digital transformation, that means being agile. And when it comes to building new business models at speed, it’s the upstart new players who have the advantage.

Revolut’s recent spike of negative media attention might defeat the adage that all publicity is good publicity. The digital wallet provider’s customer base experienced a shock when Wired magazine exposed a “toxic work culture” at Revolut, quickly followed by the resignation of the company’s CFO, with vague accusations of poor regulatory compliance in the background to both.

But the really remarkable revelation against Revolut was how little there was to reveal. A single automated regulatory mechanism had slipped past scrutiny, and the CFO rightly took responsibility. Beyond this the main accusation was that Revolut was an extremely high paced and ambitious work environment.

A tech startup gobbling up market share from the big banks at record speed is a demanding place to work?

Shocking.

Silicon Valley invades Wall Street.

It’s by no means obvious that “agile development” as a business model would have emerged from software development. Software projects back in the 20th century were known for their huge inefficiency. It’s the hyper-competitive culture of Silicon Valley in the 21st century that has made agility the key to success.

“The banks that fail fastest will be the banks least willing to pass on the benefits of digital transformation to the customer.”

Launch a minimum viable product, observe the use cases of early adopters, then burn money to be first to market with each new development. It’s this model that Revolut is exploiting. Revolut’s key insight, that customers want to fluidly switch between currencies as they travel, was arguably learned from competitor fintech innovator Transferwise. But Revolut were the agile team to connect that service to a debit card, giving the “digital wallet” the feel (if not the legal standing) of a full bank account.

It’s Silicon Valley style agile development that Wall Street is now having to compete against. Will the big banks give up profitable old markets? Banks like charging their customers high currency exchange fees. Just as record companies liked charging extortionate amounts for CDs back in the day. The banks that fail fastest will be the banks least willing to pass on the benefits of digital transformation to the customer.

The big banks will absolutely strike back.

But don’t be too fast to bet on Revolut as the future of banking. The major financial players are old hands at watching young upstarts struggle to innovate new solutions, then sweeping in to adopt new business models as their own. Nothing in Revolut’s current offering can’t be easily provided by the established banks.

Take for example Goldman Sachs new offering in the blockchain space: Bakkt. From the perspective of an institution founded in 1869, with a trillion dollars in holdings, the blockchain is just another new technology to profitably exploit. Goldman has watched the crypto market closely and is now making its play. Bet against them at your own risk…or your own profit.

However, many banks will be too hidebound to make the changes needed for survival in the age of digital transformation. Perhaps the best question to ask to assess which banks will make the cut is: who has the capacity to change? Who are the ruthless players who will bin entire organisational structures to make way for the fruits of agile development? And who is stuck in old models that will go the wall?

Email me: Samih.Abutaleb@gmail.com