First, some good things about Revolut. Their user interface is faster than any other business bank I’ve tried. Whether you’re using the web version or the phone app, the most commonly used things work really fast.
The best feature they have that most banks don’t is to automatically remember all recipients you ever send money to. No jumping through hoops to get a recipient saved; it’s done automatically. To send money to someone, just start typing their name, and you’ll get them from the autocomplete suggestions. This makes paying invoices and salaries alike a lot faster. Time is money, so this is very useful.
All banks should copy this feature right now.
Now for a few negatives.
What’s wrong with Revolut?
Here are two bad things you might want to know about when choosing your next business bank. The second one is so severe that Revolut should not be trusted with a banking license, or your money.
- Revolut has mandatory taking of selfies of your face every time you want to add a new recipient.
Seriously. - Revolut is not able to read official documents from the official registry and will freeze your account without warning, for no reason.
Again, seriously.
That second one makes it so that Revolut is a better bank for money-laundering than honest companies. To clarify, we’re not talking about a one-time thing, but a systematic, repeating issue.
1. Mandatory selfies
Revolut changed it some time last winter so that you cannot add a new recipient without them taking a selfie of your face.
That is not at all acceptable.
I would have never used or recommended them had I known that they would even consider such an idea.
What’s worse is that when you’re using their website, you can’t use their business app to take this selfie, you have to do it via a web browser that you might not agree with. Using their business app to add a recipient? Selfie is taken with the app. Using their website to add a recipient? You have to take a selfie with the Chrome Mobile browser. The browser that tracks its users the most, and which many have disabled and will not install, for that or other reasons.
I’ve asked Revolut’s customer support about the future direction of this feature, which I was hoping was just a temporary glitch, a lapse in judgment. They said the opposite was true. They will be requiring taking selfies more often and in more cases in the future.
Just blows my mind that a bank would have the audacity to mandate taking selfies. That goes beyond any expectations I might have had for what a bank might do. There’s no telling what Revolut will decide next.
2. Revolut isn’t able to verify companies’ ownership structures
I don’t know about all companies, but I do know they are grossly incompetent at verifying Finnish companies’ official documents. Which should be about the easiest to verify, so that is telling something about their general competence.
Here’s how to verify the ownership structure of a Finnish company:
- Open https://virre.prh.fi/, the official corporate document registry
(English version) - Search for the company by name or ID and open their page
- Click Open a Trade Register extract free of charge
That’s it.
Yet this goes above and beyond Revolut’s competence. Revolut insist on making the process far more complex, expensive, and unreliable. What Revolut does is compliance theater. We’ll get to that in a bit. Before that, let’s see what it is that they claim to be impossible.
How to verify a Finnish company’s ownership: Case Lidl
Here’s how to verify the ownership structure of Lidl Suomi Kommandiittiyhtiö (the grocery store chain) in three steps:
1. Open Virre, the official company document database
2. Search for Lidl and open their page
We’ll use the third one for this example. Clicking it opens this page:
3. Click this button on the right:
That’s it. Now we have the official Trade Registry extract for that company as a PDF file.
Reading the Trade Register extract for a Limited Partnership (kommandiittiyhtiö, ky)
This trade register extract has three pages. The first page starts with this:
Company type (Yritysmuoto) is kommandiittiyhtiö (ky), a Limited Partnership. A limited partnership’s ownership structure is simple. It doesn’t have shares, it has votes. One vote per voting partner, no votes for anyone else. A Limited Partnership has two kinds of partners:
- Voting partners, who are the owner-managers, and
- Non-voting partners, who have no say in the company’s management, just a financial interest
In Finnish:
Voting partner = Vastuunalainen yhtiömies
Non-voting partner = Äänetön yhtiömies
The plural forms are vastuunalaiset yhtiömiehet and äänettömät yhtiömiehet, if a company has more than one of either type.
Who are the voting partners and non-voting partners of Lidl Suomi Kommandiittiyhtiö? Let’s look at the section on Partners (Yhtiömiehet):
There is a single voting partner (Vastuunalainen yhtiömies): Lidl Holding Suomi Oy. That owner has the only vote in this company’s decision-making, or 100% of the votes.
There is also just one non-voting partner (Äänetön yhtiömies): C E – Beteiligungs-GmbH, a company in the German trade register. They have invested over 140 million euros into the venture. They do not have a vote in company decision-making. The only thing non-voting partners typically have a right to is a share of future profits. This will be defined in the partnership agreement / articles of incorporation. It is also available from the trade register, for a small fee.
That’s it. Now you know more about verifying the ownership structure of Finnish Limited Partnerships than Revolut.
Takeaways
With the above information you can go through all the Finnish Limited Partnership companies and verify their ownership structure, at no cost. You don’t need to involve anyone else, like the companies in question. This can also be completely automated.
Revolut does not seem to know this, despite their banking license requiring them to be competent at this. They do not know how to do this right, let alone efficiently or automatically. Their verification process is so broken that it’s easier to have Revolut verify a false company than a real one.
So what are they doing?
Let’s take a quick look.
How does Revolut handle verifying company ownership structure?
Finland has good public information systems so that things can be done efficiently and openly, avoiding wasted time and unreliable results. Want to verify a company’s ownership structure? Three clicks and its done. Straight from the official registry. For free.
Instead of that, Revolut:
- Requires you to spend time getting and sending it manually
- Says they are not able to read it, because it “does not clearly state the shareholder breakdown” (for a company that does not have shares)
- Says they cannot possibly accept it, because it “has not been signed or notarized”
The first one is just bad business, a waste of everyone’s time.
The second one is incompetence. If you cannot read the official document from the official source, you are not competent enough to do this verification. Revolut’s verification process is so broken they reject official documents from the Trade Registry, and only accept documents that are much easier to forge. They require the documents to also represent the companies incorrectly. They demand companies that do not have shares to present a Shareholder Breakdown. They simply do not know what they’re doing, other than compliance theater. It’s easier get Revolut to verify a false company than a real one.
The third one is a real puzzler. The last page of the registry extract, downloaded straight from the official registry, includes a digital stamp to verify its authenticity:
Revolut says that this is not acceptable at all, and instead prefer an easy-to-forge physical signature. They do not accept the official digital verification of authenticity, coming straight from the company registrar, who are the authority when it comes to company documentation in Finland.
A corporate document does not get any more official than this.
Sure, it can get more official-looking. I mean, someone can print it out and write their personal signature on it, and write that they’re a lawyer or a magistrate, and add a wax stamp with an image of an eagle sitting on a law book, but it does not make the document any more official. That’s just verification theater.
If anything, doing what Revolut requires makes the document less reliable. This original document you can get directly from the official source, so you know it’s not manipulated. Anything that does not come directly from the official source is less reliable.
And how would you verify such a second-hand document? You would compare it to the one you get straight from the official registry. Checkmate.
In summary
- Revolut’s management do not know how to read official corporate documents
- Revolut’s management do not accept the single most reliable source for such documents
- Revolut’s management mandate using less reliable documents and sources
- Revolut’s management does not know how to do real compliance, only compliance theater
These were not isolated issues but systematic ones, seen happening more than 20 times in a matter of weeks. We hope that sharing our findings will help others take steps to avoid the same issues. For example by companies may choose to use a different bank. Bank of Lithuania may review Revolut’s AML/KYB procedures and banking license. Critical parts of Revolut’s operations are not managed competently, only performing compliance theater, and will not pass a thorough review.
Revolut is a better bank for money-launderers than honest companies.
Revolut needs to stop rejecting official Trade Register extracts, and instead use them and only them to automatically determine company ownership.
Revolut should redo all their company ownership structure checks without placing any additional work on the companies in question. Revolut can do this on its own, straight from the official registry, and should never have asked nor accepted other documents to indicate company ownership in the first place. Anything else is easier to forge than the official registry extract. If a company claims their ownership is different than in the official registry, they need to update their information in the registry.
A follow-up article examines three more management takeways and reasons not to use Revolut, such as how to know when managers are pulling a heist on a company, ripping off both their employer and clients.