Revolut Targets Australia's Competitive Mortgage Market with Banking Licence
Revolut’s Entry and Strategy in the Australian Banking Sector
By Scott Murdoch
Revolut Eyes Mortgage Market Dominated by Big Four
SYDNEY, Aug 18 (Reuters) - European fintech Revolut is considering a move into Australia's ultra-competitive mortgage market and winning customers from the "Big Four" retail banks that dominate the business, Revolut Australia Chief Executive Matt Baxby said.
Revolut was granted an Australian banking licence, its first in the Asia Pacific, last month, making it the latest in a string of so-called neobanks seeking to challenge the dominance of the country's major lenders.
The four major lenders control at least 70% of the banking market, including mortgages and deposits, while Macquarie has made a rapid push into home lending where it is now the fifth largest.
Relationship-Based Products and Market Competition
"It's almost a natural progression that you move into more of those relationship-based (mortgage) products. That's a massive pool in Australia and also pretty heavily contested," Baxby told Reuters. "All the Big Four have their cannons pointed at the mortgage market."
Baxby said he believed Revolut should succeed as it had 1.2 million existing customers before its banking licence was approved in Australia, who used the platform for international payments and foreign exchange services.
Revolut’s Business Model and Product Offering
After securing the licence, London-headquartered Revolut started offering savings accounts and credit cards in Australia.
It operates a subscription-based banking model in which customers choose from four plans ranging in price from A$5.99 per month to A$99.99 a month. The paid plans, which are not common in Australia, come with tiered retail and business savings rates and reduced fees, among other benefits.
Analyst Perspectives on Revolut’s Prospects
UBS banking analyst John Storey said Revolut's success in Australia will initially depend on how many customers it can attract, its app engagement, customer spending levels and deposit balance growth.
"Revolut is a more credible threat than most prior challengers because the model is deposit-led, technology-heavy and increasingly broad in product scope," he wrote in a note, adding Australian banks' near-term earnings risk was still limited.
Competing with Major Banks
Financial Performance and Expansion Plans
Revolut Australia recorded A$70.8 million ($50.32 million) in revenue in 2025, up 74% on the prior year, according to its financial accounts. Its net profit reached A$7.4 million and its net interest income was A$17.1 million, up 110% year on year.
Revolut has expanded into 40 countries since it began operations in 2015, and is set to launch in India, part of the firm's plan to reach 100 million customers by mid-2027.
Revolut recently launched a secondary share sale with a target valuation of around $115 billion, which would make it worth more on paper than European banking stalwarts such as Barclays and Societe Generale.
Challenges Facing Neobanks in Australia
Its business growth in Australia, however, will not be without challenges, analysts said.
Two Australian neobanks, Xinja and Volt, closed in 2020 and 2022, after failing to gain scale against Commonwealth Bank, Westpac, National Australia Bank and ANZ.
Analysts attributed Xinja's 2020 closure to the bank offering high deposit rates to gain customers, but not launching lending products quickly enough to offset the high costs it incurred.
Customer Loyalty and Profitability Factors
Joshua Koh, a partner at consultancy firm Simon-Kucher, said Australian banking customers had proven reluctant in the past to move away from a major bank.
"People use neobanks for very specific reasons, typically the high interest rate that they offer," he said, adding the Big Four banks would continue to attract customers for their transaction banking capabilities.
Revolut is, however, already profitable in Australia, Baxby said, on the basis of other sources of revenue such as foreign currency transactions and interchange fees, which are payments made by merchants' payment providers to customers' card-issuing banks whenever a card transaction occurs.
"We use a lot of the services the Revolut group provides as part of that. And I think, as a startup bank trying to build those things from scratch, it's just a really tough gig. So it puts us in a good position to be able to compete with the major banks."
($1 = 1.4069 Australian dollars)
(Reporting by Scott Murdoch in Sydney, Additional reporting Tommy Reggiori Wilkes in London; Editing by Sumeet Chatterjee and Jacqueline Wong)
