Coronavirus will “accelerate and exacerbate” consolidation says Revolut’s Banking CEO Richard Davies

By Oliver Smith on Wednesday 20 May 2020

Digital Banking

Speaking at the AltFi Digital Summit 2020 Davies pointed to the opportunity of a bank acquiring a non-bank lender.

Coronavirus will “accelerate and exacerbate” consolidation says Revolut’s Banking CEO Richard Davies
Image source: Richard Davies (Right)/AltFi.

The fintech sector could be approaching a point of consolidation, Revolut’s Banking CEO Richard Davies said at the AltFi Digital Summit 2020 last week.

“You’ve got a maturity wave where lots of people start things and get scale, and naturally we’ll see some consolidation because of that,” said Davies.

“I think this crisis will accelerate and exacerbate that. Yes you’ll see consolidation amongst fintech players, I think you’ll also see the corporate venture arms of banks trying to take advantage of that.”

In particular Davies pointed to the current struggle of non-bank lenders, struggling with institutional fundraising and a lack of government support during the coronavirus crisis.

“The opportunity to put together bank deposits, i.e. stable low cost funding, with that sort of non-bank lender that may have a very good origination and underwriting facility is a very obvious thing that might come out of this,” he added.

Earlier this month Revolut CEO Nikolay Storonsky floated the idea that the digital banking player might be looking to use its recent $500m fundraise to fund its own acquisitions.

The fintech recently hired Don Hoang, former director of business for Uber, to lead its M&A activity.

Among the first mulled by Storonsky in an interview with The Financial Times was travel aggregation, a sector which has been wrecked by coronavirus and the CEO believes is ripe pickings to bring into the Revolut fold.

“There’s nothing firm right now, but we’re in the fortunate position where we can look at opportunities when they arise,” Davies told AltFi.

Watch the full AltFi Digital Summit interview with Revolut Banking CEO Richard Davies:

Rewatch AltFi Digital Summit Day 1: Revolut, Freetrade, ComplyAdvantage, Innovate Finance and Nutmeg

Rewatch AltFi Digital Summit Day 2: PensionBee, Starling Bank, Just Cashflow, Bunq and Plaid

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.