Revolut eyes trading and wealth push amid hiring spree
Revolut has laid out its initial blue-print for major expansion in its trading operations after the fintech giant bagged its full-fat UK banking licence earlier this month.
The $75bn digital banking juggernaut has kicked off a hiring spree at its Canary Wharf headquarters as well as other financial hubs across the globe.
The fintech has begun advertising for a raft roles in its new ‘Wealth and Trading’ division, in the clearest sign yet that the unit looks to be a big target for post-licence focus.
That includes an advert for a new product owner, a role which involves direct oversight of their specific area with full responsibility for the lifecycle and outcomes of a financial product. Revolut’s job ad notes the role will involve developing, launching, growing and maintaining products from “ideation to development”.
For the product owner, the job advertisement also notes “experience in margin trading or trading platforms” would be “nice to have”.
Margin trading – also known as leveraged trading – serves as a high-growth and potentially high-profit area for lenders, allowing banks to earn both commission and interest on cash dished out.
Traders pay a small percentage of an investment’s cost and borrow the rest from the bank to control a much larger position.
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Fully-fledged UK banks are able to use customer deposits sitting in regular current accounts to fund margin loans, meaning firms pays little-to-nothing for the capital but can charge for it to be borrowed.
The expansion into margin trading for Revolut is still in early stages, Morning Wire understands, with no key developments made on funding loans.
Revolut’s main trading platform is integrated directly into the financial powerhouse’s app, often slotted under the wealth and invest umbrellas, and serves a different entity to the recently-green lit UK bank. The fintech has also launched ‘Revolut X’ for high-volume cryptocurrency trading.
Revolut’s website says: “At the moment, we don’t offer the possibility to trade with leverage.”
It also notes “Leverage trading is considered high risk as it amplifies both gains as well as losses.”
The fintech is also advertising for a business risk manager in the division, which labels the new role as the “first line of defence and support” and adds it will be the “first to be involved in new initiatives”.
Last week, Morning Wire reported that Revolut’s licence win would trigger a ‘deposit war’ with Natwest and Lloyds the main targets.
Analysis from Bloomberg Intelligence calculates that every £10bn of current account outflows from the UK’s top lenders could lead to as much as £375 million in annual net interest income erosion – a four per cent dent to the expected profits of Lloyds and Natwest this year.
An expansion into margin lending would see Revolut go toe-to-toe with Robinhood, which offers a subscription service for competitive borrowing rates, and US brokerage titan Fidelity.
A spokesperson for Revolut said: “We already offer a number of different products on our trading platform.
“We want to build on this momentum and continue to explore new ways to serve our trading cusstomers, and part of this is adding new ways for our customers to trade.”