Former top executives from PrivatBank are to roll out a mobile-only bank in the United Kingdom, they announced on social media on Feb. 26.
Fintech Band, a tech company co-founded by three former PrivatBank leaders, has already developed a mobile bank in Ukraine. It’s called Monobank, and works with Universal Bank, to which it has brought 100,000 new users in its three months of operation.
Now the Ukrainians are going global.
Former PrivatBank Information Technology Director Dmytro Dubilet, one of Fintech Band co-founders, said on Feb. 26 that a Monobank-like service would hit the British fintech market in autumn 2018. He said the company was opening an office in London and is now applying for licenses to run a business in the UK.
The company has been developing a product for Britain for several months. Most of the services the company launches abroad will work in Ukraine as well, Dubilet wrote on Facebook.
“So our Ukrainian clients will only win from this,” he said.
The entrepreneur says there is no name for the service just yet – the company is still working out a brand strategy, and have hired a British marketing agency to help with this.
Why the UK?
The company is negotiating partnerships with several venture funds to obtain investments for the rollout. The businessmen are not planning to partner with banks, as they can work with electronic money without having a banking license in Britain – something that’s forbidden in Ukraine.
“The market and legislation are more flexible there,” Dubilet told Ukrainian tech publication AIN.ua. “Monzo and Revolut, and all the other digital banks received licenses for payment services and electronic money only, and that was enough for them to start. We will go the same way.”
Taking a niche in Britain is the first step for the company’s expansion. Later, it plans to expand to the rest of Europe. It has already worked for a company in Kazakhstan, but hasn’t advertised it.
“Now we understand that we’re ready to go global,” Dubilet said, adding that Fintech Band aims to achieve a capitalization of $1 billion.
The company decided to start its global expansion in Britain, despite the high level of competition there, because the country has “a favorable environment for fintech startups” and is a good place to advertise its services to the world.
“If you succeeded in Italy or Spain, you wouldn’t still be in the spotlight for funds and media,” whereas in the UK, you would, Dubilet said.
A video promotes mobile-only Monobank. It allows one to open and manage a bank account online.
From PrivatBank to Monobank
PrivatBank is Ukraine’s largest bank, it has 20 million users. Dubilet and two other Fintech Band co-founders, Mikhail Rogalskiy and Oleg Gorokhovskiy, used to be top executives there but were fired along with the rest of the bank’s management after it was nationalized in 2016.
PrivatBank was plagued by unpaid insider loans that left a hold of at least $3.4 billion in its ledger, according to the National Bank of Ukraine. Part of its $6 billion in losses will now have to be covered by the Ukrainian taxpayer, as when it was in private hands, the bank’s assets were exaggerated and many of its loans went bad. The news of PrivatBank’s nationalization was welcomed by the International Monetary Fund, which has provided Ukraine with a low-interest, $17.5 billion stabilization loan.
PrivatBank provides its clients with online banking through a service called Privat24. Fintech Band’s Dubilet headed the service’s development back then, and until recently Privat24 was the country’s most modern internet banking system.
Mobile-only Monobank works in Ukraine using the banking license of Universal Bank. Dubilet refused to elaborate on the terms of Monobank’s agreement with Universal Bank, saying only that the conditions are “commercial.”
The bank belongs to Ukrainian tycoon Sergiy Tigipko – once an ally of runaway former Ukrainian President Viktor Yanukovych. Tigipko ran in the 2014 early presidential election after Yanukovych fled to Russia, finishing with 5 percent of the vote. Since then he has kept a low profile politically.
In an interview with the Kyiv Post in November, Dubilet insisted there should be less politics and more commercially driven agreements in business – like the one between his Monobank and Tigipko’s Universal Bank.
“There’s too much politics in our lives,” he said. “We brought the best product to the market – why should you reject it just because of politics?”
The Kyiv Post’s technology coverage is sponsored by Ciklum and NIX Solutions. The content is independent of the donors.
