How Revolut is changing the Maltese banking system

Abstract

Since Revolut became available in Malta in 2018 this financial institution has experienced a large influx of people turning to it for their banking needs. Revolut was welcomed in Malta and was endorsed by the Prime Minister at the time with the founder of Revolut hailing it to be the revolutionary banking alternative that would provide a technology first substitute for the Maltese people. Although it is a relatively new company, the number of people in Malta that signed up for Revolut stood at 120,00 at September 2019 which is a significant segment of the population, indicating that there could be a large change in the financial sector in Malta afoot. The aim of this dissertation is to examine how Revolut is in fact changing the Maltese financial system as well as analysing whether local traditional banks can take the necessary technological steps to be able to continue serving consumers. Furthermore, it aims to provide recommendations for local banks as to what drives respondents to use Revolut over their financial applications in order to be able to implement changes to improve competitiveness. To carry out this research, data was collected in two forms; one was through surveys and the other through interviews with bank representatives. The surveys focused on determining who uses Revolut and what are the motivations behind it, whereas the interviews focused on obtaining the perspectives of local banks on the changing financial landscape. The key findings of this study were that the majority of respondents make use of Revolut, with the main influencing factors behind why people prefer Revolut being ease of use, convenience and cost. However, it also resulted that where Revolut lacked, local banks thrive such as issues of security, local presence and availability of credit facilities. It is therefore recommended that local banks should address these factors to be able to improve competitiveness in the market. This could be done by including other factors into their banking applications that would either save money for consumers or create an easier and faster method of conducting transactions.