Revolut Plans Expansion into Stockholm to Compete with Klarna
Revolut, the UK-based digital bank, has reportedly outlined plans to open a new branch in Stockholm in a bid to strengthen its foothold in the Nordic region. The move is seen as a direct challenge to Klarna Group and the established Nordic banks. This strategic expansion aims to increase Revolut’s Nordic customer base from two million to three million by the year’s end.
Deepening Presence in the Nordic Region
The digital banking sector has been booming globally, with fintechs like Revolut and Klarna offering innovative solutions to traditional banking. Revolut has marked its presence in the Nordic region with Sweden accounting for half of its regional users. The planned Stockholm branch is a part of the fintech’s aggressive push into the Nordic market, targeting not only Klarna but also the established Nordic banks, which currently control the majority of household deposits.
Operational Strategy in the New Market
The Stockholm branch will operate under Revolut’s European banking licence, which was issued in Lithuania. This will enable the company to provide Swedish International Bank Account Numbers (IBANs), thereby allowing customers to receive salaries, set up direct debits, and process local transfers through Revolut accounts.
In addition to banking services, Revolut is also preparing to roll out additional products in the region, including daily-interest savings accounts in Nordic currencies. The company aims to offer commission-free exchange-traded fund (ETF) investing and Apple’s tap-to-pay functionality for small businesses.
Staffing and Expansion Plans
Revolut has already begun hiring across Sweden, Finland, Norway, and Denmark. The company is also strengthening its compliance, operations, and risk management teams to support its regional growth. Revolut’s Chief Growth Officer, Antoine Le Nel, has stated that local traditional banks are its true competitors. However, strong buy-now-pay-later players such as Klarna cannot be ignored.
Revolut vs. Klarna: The Competition
Klarna, which serves around 80% of Sweden’s population, boasts 110 million users worldwide and holds a market value of nearly $14bn. On the other hand, Revolut currently has around 65 million users and aims to reach 100 million users within the next two years. The company is also in the process of concluding a fundraising round aimed at achieving a $75bn valuation.
Revolut’s operations currently span 40 markets, with plans to expand to 70 by 2030. However, in the UK, Revolut is facing delays in securing a banking licence due to regulatory concerns about its risk management capabilities amidst its global expansion.
Despite the challenges, Revolut’s ambitious expansion plans into the Nordic region signal a significant shift in the banking landscape, with traditional banks facing increasing competition from fintech firms.
For more details on Revolut’s expansion, click Here.
