Better providers assist Revolut and fintechs rise whereas huge banks stutter

The road towards a UK banking licence for Revolut has been long and winding. But if it really intends to challenge incumbents in Britain and around the world, licences from Lithuania and Mexico were never going to be sufficient.

Fintech is one of the many areas where the UK has competitive advantage. It was going to take time for the likes of cash transfer group Wise, Monzo and online asset manager Nutmeg to pass muster with regulators.

The arrival of the new breed, with slick intuitive systems, which can only get better with AI, is to be applauded.

It demonstrates the space for innovation in finance.

A new bank: Revolut had struggled to get a UK banking licence but has now finally got one

Newcomers are able to shine by offering choices and service levels with which the established high street banks struggle.

This week I tuned into a BBC broadcast of ‘Money Box’ live where a former employee of one of the Big Four banks found herself in a Catch 22 situation over releasing funds under powers of attorney.

She was confronted by the ignorance of branch staff, the necessity of travelling 14 miles to the nearest branch and an incorrect instruction to contact headquarters. It was only when she mentioned that she was a former staff member that the issue was resolved.

Anyone who has any dealings with the high street banks will recognise how customer assistance and the range of services has collapsed. Revolut, with additional offerings such as managing online subscriptions, breaks the mould.

The path towards being able to offer banking services such as deposit taking (with an insurance guarantee) and mortgages has been rightly arduous because of audit and systems snafus. The path for a multi-billion initial public offering, with a potential value of £30bn, is opening up.

Serendipity means that Revolut’s licence breakthrough came on the same day as Lloyds Banking Group, Britain’s biggest mortgage lender, produced less than scintillating results.

Profits picked up in the second quarter on a recovering mortgage market amid fading windfall income from high interest rates. That may be just as well for the established banks, given the search by Chancellor Rachel Reeves for revenues as the Treasury completes its fiscal review amid hyperbole about the worst economic situation since the Second World War.

The encouraging aspect of Lloyds’ quarter is the reduction of provisions from £419m in the three months to June last year, to £44m, showing renewed health in the economy.

If Lloyds is aiming for a better valuation, then it and the other high street lenders need to demonstrate, in the manner of the Revolut and other fintechs, that they are capable of providing a range of services for consumers of all ages. Time for its boss Charlie Nunn to think out of the box.

Finding purpose at Unilever

Unilever is on a roll. In recent times, Britain’s brand champion has found itself in the slow lane when up against rivals Nestle and Procter & Gamble.

Hein Schumacher, backed by the ever vigilant Nelson Peltz, is starting to deliver the transformation craved.

First-half figures lifted Unilever shares 6 per cent while Nestle dipped 5 per cent. Quite a cross-over. Indeed, since April Unilever is up 25 per cent. Imagine how high the shares might be if were there not a London discount.

If the original Lever Brothers were still with us they would be gratified to note that beauty, well-being and personal care sales are buoyant, reflecting company origins at Port Sunlight.

Core food brands Hellmann’s and Knorr are holding their own. But ice cream, up for sale or preferably a London float by the end of 2025, is lacklustre.

An extra £600m in promoting the biggest brands is paying off – a new dawn for a company which finally has discovered purpose in profitable brands.

High net worth for basketball

Football’s Premier League, followed closely by Indian Premier League cricket, like to think of themselves as the world’s richest sporting franchises. Not any more.

A consortium of broadcasters, including Sky owner Comcast, has concluded a deal to show National Basketball Association games for the next 11 years, for £60bn.

Now we are talking real money.