Competitive fintech in Ukraine, or the reasons why Revolut does not enter the Ukrainian market

Today we will have a flashback to October 2019, when the first rumors spread about Revolut’s intentions to enter the Ukrainian market. Drawing my attention to the voices of support for such a decision, I wrote a blog about the pitfalls that a fintech startup can face. At that time, there were 3 main reasons to believe that it would be difficult for Revolut:

● high level of development of the financial market;

● the Ukrainian market is a master of the “long siege”;

● innovations are invented or quickly implemented here.

These 3 features of the fintech ecosystem were adjusting the future of a startup within Ukraine. Why did Revolut bypass our market?

Ukrainian fintech projects find their first client in up to 6 months period (according to USAID). 75% of corporate-focused fintech companies took less than 6 months to find their first client after completing product development. It is important to note that among those who offer services and solutions to banks, the result is very similar (73.6%). The demand is satisfied with the supply, which means that the system of the financial market in Ukraine is healthy.

Ukraine is famous for its resourceful developers. Their salaries are still lower than European ones, but the level of efficiency and qualifications occupies the highest positions. This fact has long ago made Ukraine attractive for outsourcing and R&D in various areas of fintech. That is why Revolut took the path of least resistance — it opens an R&D center.

Ukraine is a relatively small market. At the same time, it is very competitive, and the consumer is quite spoiled. We have already talked about the history of Uber in Ukraine and its domestic rival Uklon. So, in fintech, it is not easier.

Ukrainian Monobank, potentially a direct competitor to Revolut, reached 3 million customers in 2020. 3 years = 3 million. Not bad, right? And they are only the third one in card issue: after Privat and Oschadbank. Both are state-owned banks with the strongest infrastructure. And there are also smaller neobanks. An external player will have to localize their solutions to compete.

Well, fans of the startup have been waiting and will wait further for the “Revolut” to enter the Ukrainian market. But the reasons for its absence on the market in 2021 are not upsetting, they show us the bright future of the Ukrainian fintech industry.