Iona Bain
Revolut, the digital bank I called to account over its tube ads, is now suffering from an outbreak of whistleblowing.
In a series of reports that expose the nonsense that there is ‘no such thing as bad publicity’, the Lithuanian-registered fintech is accused of losing a raft of key financial executives, disabling a money laundering protection, and, most disturbingly, enforcing a toxic workplace culture. The FCA has now launched a second probe into the the company, after Young Money Blog reported the notorious advertising campaign and the FT discovered the company had made up its numbers.
Young Money Blog can also reveal another aspect of Revolut’s unpleasant modus operandi. YMB was intimidated by Revolut’s legal team into removing tweets sent by a whistleblower which show disturbing internal reaction to public criticism of its advertising campaign.
After a link to Christina Patterson’s Guardian column, which criticised the company’s “single-shaming” ad was posted in an internal Slack channel, one employee commented: “Oh fuck off”. Another wrote: “It’s a Brexit/book promotion/rant piece – journalism has really fallen to new lows.”
The brand’s head of communications boasted about how the campaign – which is being investigated by the regulator – created a “massive boost for brand awareness” and that “majority public sentiment is on our side and not at all offended by the ad!” He went onto describe the ad’s critics as “snowflakes”.
When Young Money Blog posted screenshots in the public interest, we were sent a heavy-handed legal letter threatening to refer us to the Information Commissioners Office unless the tweets were removed. We did so in the belief that it would avert a legal row that we don’t want and can’t afford.
Young Money Blog is a one-woman, non-profit venture but I am grateful to have received some legal pro-bono help on the back of this controversy – with lawyers informing me that this demand was – at best – highly questionable. Moreover, the letter said I was forbidden from discussing it in any public forum.
This is the only communication I have received from the company, which made only a passing reference to the original controversy, saying I was welcome to arrange a call with the company to begin an “open and constructive dialogue” about their advertising strategy.
Here are the other big developments being reported this week.
Compliance cover-up?
It began yesterday when the Daily Telegraph revealed that for three months last year Revolut switched off an automated system designed to stop dubious money transfers.
As a result, thousands of illegal transactions may have passed through the bank between July and September of 2018.
Revolut launched an internal investigation in late 2018 after a whistleblower contacted Revolut’s board. It admitted the failings in a letter to the FCA – a letter seen by the Telegraph which the bank later claimed was a draft and “never sent”.
Then today the Telegraph reported that chief financial officer Peter O’Higgins, who joined in 2016 after 12 years at JP Morgan, had resigned in January as the company was grappling with those compliance systems.
Revolut insisted his departure had nothing to do with compliance concerns. On money laundering screening it said “to the best of Revolut’s knowledge there has been no breach of law with respect to sanctions requirements”.
Financial compliance experts said the switch to a weaker screening system was a serious issue for the growing financial technology business, the Telegraph said
In a rare public intervention, Revolut chief executive Nikolay Storonsky responded that the screening change was “a systems enhancement project that we were rolling out”.
Toxic workplace culture?
But it was the simultaneous appearance of an in-depth report in Wired that has set the fintech world rocking.
In its report yesterday the online mag revealed that former Revolut employees say the bank’s high-speed growth has come at a high human cost – with unpaid work, unachievable targets, and high staff turnover.
It revealed that second-round interviews for the posts, still advertised currently, of country business development managers involved an unpaid exercise.
The instructions on the exercise said the applicants should recruit at least 200 clients in a week to have a chance at passing to the next interview phase. The task’s description didn’t guarantee that reaching the target would automatically qualify applicants for a job, but did advise them on a number of ways they could get clients, such as sharing a “promo code” with their friends, sharing it on social media, and posting promotional flyers on university campuses.
When applicant Laura (not her real name) refused to go further, the bank’s head of business development offered “apologies you’re not up to show what you’re capable of”.
Following revelations about the exercise on Spanish website eldiario.es, Chad West, Revolut’s head of communications, said the company had shut down the practice “immediately” after being made aware of it.
At the time, besides the role Laura had applied for, the company was recruiting for similar positions in eight other European countries, but West wouldn’t answer questions about how widespread this practice was, how many clients Revolut had acquired that way, or which company executives had been aware of the practice.
It cites the view of “several former employees” that the fact managers considered it acceptable to ask applicants to work for free was a reflection of Revolut’s wider culture which valued hitting targets at all costs.
The report quotes Stevie Buckley, co-founder of Honest Work and HR advisor to dozens of startups, saying Revolut is known for burnout and high staff turnover.
It says an analysis of the start and end dates of 147 former Revolut employees on LinkedIn suggests that over 80 percent had lasted less than a year, and over half stayed at the company for less than six months.
Last spring, CEO Nikolay Storonsky had sent an announcement to all staff through the company’s Slack messaging service, saying that any members of staff “with performance rating ‘significantly below expectations’ will be fired without any negotiation”.
Country managers in weekly joint calls would be “cut off in mid-sentence” by their manager, but complaints to Storonsky about his style fell on deaf ears.
Sources say at least one former head of HR resigned after failing to convince Storonsky that the company had to change its dogmatic approach to performance targets. In the last two years a total of three different people have headed the HR department.
Wired says Revolut declined to comment on any of the culture issues raised in its report.
Watch this space.
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Thank you for the article. Always interested in banking, I like to learn something new