Innovation Report: Revolut's Development and Future Strategies

This report analyzes Revolut, a FinTech company, focusing on its innovation strategies and future development. It begins with an introduction to innovation and its importance for business growth, followed by an in-depth explanation of the Diffusion of Innovation (DOI) theory, including its adopter categories (innovators, early adopters, early majority, late majority, and laggards) and influencing factors like relative advantage, compatibility, complexity, trialability, and observability. The report then applies the DOI theory to Revolut, examining its historical development, including its prepaid debit card and mobile app, and discussing potential future innovation pathways. Revolut's role in simplifying financial transactions and providing secure services is highlighted, along with its impact on customer satisfaction and operational efficiency.

INNOVATION

Table of Contents
INNOVATION...............................................................................................................................1
INTRODUCTION...........................................................................................................................3
Part 1 Explaining innovation theory in detail..................................................................................3
Diffusion of Innovation (DOI) theory.........................................................................................4
PART 2 Applying the theory to explain the historical development of one product and the paths
for future possible developments.....................................................................................................7
Introduction to Revolut Ltd.........................................................................................................7
Historical discussion of innovation:-..........................................................................................7
Future innovation pathway:-.......................................................................................................8
CONCLUSION.............................................................................................................................11
REFERENCES..............................................................................................................................12
Appendix........................................................................................................................................14
The Business Model Canvas..........................................................................................................14

INTRODUCTION
Innovation is refers to the process of bringing new idea or any creative thought in form of
solution for emerging requirements and the unfulfilled needs or any need. It is consider to be
essential for a business in term of its success and growth. It brings positive change in the
organisation by working over improving the efficiency, productivity, quality and market share
(Bain and Kleinknecht, 2016). This report is based on Revolut which offers banking services
such as pre-paid debit card, currency exchange and peer-to-peer payments. They have created a
mobile app which provide supports in spending and provides ATM in which cash can be
withdrawal within 120 currencies and it send in 29 currencies (Bain and Kleinknecht, 2016). The
main aim behind conducting this report is to provide an in-depth knowledge regarding the
innovation that can be bring by Revolut in order to improve operational efficiency and future
growth in marketplace. Current report perform a detailed analysis of innovational theory to
identify several factors which help a company in bringing innovation within business. In addition
to this it also includes an application of innovational theory for evaluating the historical
development performed by company that support in identifying the future development pathway
for product or services.
Part 1 Explaining innovation theory in detail.
Innovation is defined as the process of identifying new methods of performing work
which support in improving the outcome of particular action in positive manner. It support a
business in improving their operations and offering better services to its customers at
marketplace. Innovation is crucial for the growth of a company as innovation support in
improving the product or services that help in retaining customers for longer period of time.
In this techno-advanced world the innovation has now become a most crucial part of
business as the competition has increased among companies regarding offering of high quality
and unique products for keeping customers satisfied and retained for longer period of time. This
is only possible by bringing innovation in term of production and offering of unique product or
services as it support a business in achieving sustainability within marketplace (Bason, 2018).
The need of an organisation regarding implementation of new innovative process and techniques
is get identified with the help of research and development department which identify several

trends prevailing in industry that help in improving the market performance. The importance of
innovation can be better understood with the help of theory named as 'Diffusion of Innovation'.
Diffusion of Innovation (DOI) theory
The Diffusion theory is one of the most oldest social science theory which was given by
E.M Roger in year 1962. This theory is basically used in the process of communication which
help in exploring the ways through which an innovative idea or process is communicated in
manner of utilising various channels. This theory is originated within the communication to
determine how over time a particular idea or product gain momentum or get spread (diffuses)
within the social system and as an outcome the people being a part of social system adopt a new
product, idea or behaviour. The most essential aspect of such adoption is that personnels become
able to perceive the new or modified technology (Bernstein, 2015).
According to this theory, Adoption of new idea, product or behaviours not happen
suddenly in social system instead it is a procedure where some individuals are more apt to adopt
the innovation as compare to others. Hence, while promoting a particular innovation within the
society it is very essential to understand the features or attribute of targeted populations that
support in helping or hindering the adoption of innovation later. As per the philosophy of
Diffusion of innovation there are basically five adopter category exists among them majority of
people belongs to middle categories but still there is a requirement of gaining an insight within
the trait of targetted audience. There are number of strategies that are being used by business
organisation while dealing with various adopter categories. The basic adopter categories that are
involved within the Diffusion of Innovation theory are describe below:
 Innovators:- When a new product is introduced in the market, innovators are consider as
the first individual to buy the products. This is basically a small group of people who are
more active and want to be the first to try the product as they are willing to take risk
(Berry and Berry, 2018). These people within the group are therefore called as trend
setter as they firstly use new innovations introduced in market and then suggest others to
work for the same that further support in making product popular that leads to increase in
sales. For attracting such people a company can promote the product in terms of its
uniqueness and attractiveness.
 Early adopter:- As like innovators the early adopters are the one who like to try out new
things and are not afraid of trying new things. This group is basically larger one as

compare to innovators group and they also holds much knowledge about the new
products and because of this they plays a crucial role within strengthening the position of
product at marketplace. As early adopter support in performing word-of-mouth publicity
for the new product and as a result of which the sales get increased. They are more aware
about the need of adopting changes and appreciate new or innovative ideas (Biemans,
2018). In order to attract such people people toward innovative product strategy can be
adopted to represent a How-to manual along with information sheets that contains
information regarding its formulation.
 Early majority:- This group is consists of those individuals that adopt ideas or process in
significantly a long course of time as compare to early adopter or innovators. They
capture majority of marketplace. The individuals who comes under the category of early
majority loves trends but they prefer to wait and see the experience of others before
making purchasing decision. The product is bought in droves by this group when it
become extremely popular which in turn causes landslides in demand. In order to attract
people of this group for purchasing new or innovative product by providing them
evidence about the effectiveness of innovation or its success story for making people
more influencing toward a particular product.
 Late majority:- This includes those people which lags behind and only buy the products
once it has been purchased by majority of people and its popularity is already started
being declining. This group late adopt this group as they wait for seeing proof of its
favourable outcome for ensuring that the product is good to use as majority of people
used it and proved it right (DiMasi, Grabowski and Hansen, 2016). Strategies which can
be used for targeting the people come under late majority people is that it must focuses
toward presenting the data which is related with number of people that have previously
tried and adopted the innovation feasibly.
 Laggards:- The individuals who belongs to this category are consider as the last adopter
of the innovative practices as they are highly influenced with the traditional thinking and
conservations ideology. Laggards are consider immensely as skeptical and it is very
typical to influence them for adopting the innovation. The strategies that can be used for
influencing such people to adopt innovation can be comprises of fear appeals, pressure

arising from the personnels that are involve in adopter category or statistics regarding the
product sale in market.
(Source: Diffusion of Innovation theory, 2019)
The stages with which an individual carries out the adoption of innovation involves
creating some awareness about the product for bringing innovative ideas or practices, testing idea
for determining its feasibility for deciding about the performance of idea and then continuous
utilisation of innovation. But there are some major elements which plays a crucial role in order to
influence the adopter category and these can be better understood using following factors:
Relative advantage:- This factor support in representing the extent to which a new
innovation is considered to be better that the product or services which is going to be replaced
with the improved one.
Compatibility:- This is the another factor which support in adoption of new innovation
by the customers after determining the extent to which it is capable of fulfilling the need,
expectation and demand of customers along with dealing other substitute present in market
(Etzkowitz and Zhou, 2017).
Complexity:- The extend to which a particular product or technique complex in its usage
also affect the decision of purchaser regarding the adoption of innovation as they are more
comfortable to adopt such things which are easier to use and provide more benefit then previous
one.
Illustration 1: Diffusion of Innovation theory

Trialability:- The adopter also get influenced by the extend to which it has been
experimented or tested by the individual before purchasing it. It makes it easier for the new and
innovative products with the help of which many benefits can be provided to the customers from
trialability.
Observability:- This factor is about exploring the fact that up to what extend does
innovation provide benefit to individual that are visible to others (Gomez-Uribe and Hunt, 2016).
So with the help of observing the behaviour of customers, some new features are provided in the
products and services of the company to their customers.
PART 2 Applying the theory to explain the historical development of one
product and the paths for future possible developments.
Introduction to Revolut Ltd
Revolut Ltd is a financial technology company established within U.K and offers various
banking services which include currency exchange, pre-paid debit card, cryptocurrency exchange
and peer-to-peer payments. The Revolut company has its own mobile application that supports in
spending and ATM withdrawals within 120 currencies and sending into 29 currencies directly
with the help of application. In addition to this it also provides its customer an access to
cryptocurrency which includes Litecoin, Ethereum, Bitcoin, XRP and Bitcoin Cash by
exchanging it from and to 25 fiat currencies. This organisation is a London based start up that
was founded by Nikolay Storonsky and Vlad Yatsenko. Despite of offering online services for
financial transactions it also support in providing a greater assurance about the security to the
customers by providing option of freeze and unfreeze card, location based security, control the
manner in which a card works etc. (Revolut Launches New Business Mobile App, 2019).
Historical discussion of innovation:-
Revoult is a FinTech company which started performing its operations by 1st July 2015
and get founded by Nikolay Storonsky and Vlad Yatsenko which is headquartered within
London, United Kingdom. It develop over the concept of providing an easy and secure medium
of performing financial transaction and getting access to currency much effectively (Kerr and
Nanda, 2015). This organisation has go through several technological and innovation
development by working over continuously searching for a new idea for providing better
experience in everything they perform. This is because today's hyper connected world demand

for a financial partner that help in fulfilling the need of individual regarding global spending and
transfer without thinking about rubbish exchange rate. The several innovational development
performed by Revoult Ltd in its operations that supported in keeping its customer satisfied and
improving its operational efficiency which includes a prepaid debit card for simplifying the
transaction process. The Revolut offer the prepaid debit cards to the customers where they are
not any account number or sort code, this make it easier to perform transactions online as it
reduce the complexities (REVOLUT CARD, 2019).
Despite of this for improving its operational efficiency the Revoult has also launched a
mobile app so that its customers can perform financial transactions much effectively and easily.
This mobile app helps used in tracking the corporate card spending in real time, can view card
details, freeze or unfreeze card in case of misplace and receives instant spending notification
after each payment performed by card (Revolut Launches New Business Mobile App, 2019).
This has supported in enhancing the security over the financial transactions performed by
customers of Revoult in order to reduce the complications and providing more positive
experience to the users. For this it has adopted an option of location based security feature where
the GPS location of phone is being tracked for identifying the whether the transactions are being
performed by the owner or involves certain type of fraudulent transactions (Security - the way
you want it, 2019). Apart from this it also worked toward improving the crypto exchange process
which is very time consuming and complex, hence in order to provide a greater experience the
Revolut has cut down the extra steps by adding feature in mobile app where just a touch to
button provide a direct exposure to cryptocurrencies. In addition to this it also provide a feature
where real-time cryptocurrency graph represent the current rate and provide a price alert when
the currency rate hit a certain value. In this competitive world it become very crucial to stay
technically updated and stay apart from the crowd in order to shine in the market along with
keeping customer for long run as they are key to success (Kogan and et. al., 2017). This is
because Revolut put more emphases toward regularly innovating its operation process so that it
would be able to keep innovations continually diffusive and for providing relative advantages to
customers. This historical innovations performed by Revolut toward improving its working and
operations process supported in achieving sustainability in marketplace.

Future innovation pathway:-
Revolut has a successful history due to number innovation it performed with an aim to
deal with competition in market and providing high quality satisfactory services to its customers
for simplifying their finance related need. Now, company is planning to further launch a new
innovational process related with customer assistance with the help of AI that support in
providing customers a better experience with Revolut. This innovation would be named as
'Voice assistant' which help in assisting the customer who visit to its mobile app regarding the
manner in which they have to perform work and actions to be taken in particular issue (Manzini,
2015). For this customer are required to install this feature which present it as another icon in
mobile screen where they have to enable the feature for getting voice assistance regarding the
actions they have to perform in its Revolut app. But in order to implement it effectively Revolut
must use innovation theory named as Diffusion of innovation which involves number of factors
that impact the adoption rate of innovation within marketplace. It can be better understood using
following description:
Relative advantage:- This innovation of Revolut support it in keeping customers more
satisfied and aligned with the services offered by company as it provide addition benefit to users.
This is because voice assistance feature in mobile guide the users regarding the steps to be
followed for performing a particular action.
Compatibility:- The customer who deals in cryptocurrency basically go through number
of issues as it involve several steps before exact exchange of currency. In such procedure the
mistakes performed by customer may leads to their financial loss. Hence, the voice assistance
would be compatible to this situation as it guide the customers regarding the current rate of
currency and actions they must perform which reduces the confusion along with the chances of
mistakes.
Complexity:- This factor involves the extend to which a particular innovation is high or
low in term of complexity. The voice assistance innovation of Revolut is mainly planned for
removing the complexity that customers found in performing digital banking practices as it is
quite confusing (Pisano, 2015). So the voice assistance option when clicked by the user a voice
will guide over each step to be taken by customer in order to perform particular action which
make it easier for the one who are new to digital banking and not much aware about its usage.

Trial ability:- In order to promote this new feature among the existing and potential
customer Revolut provide a free trial for at least a week so that customer would be able to
determine the benefits it provide to them and be influenced toward purchasing it (Tidd and
Bessant, 2018). It customers don't like this feature then they can uninstall it, as this feature will
be add into mobile in a separate icon which support in forming up the purchasing decision of
customer.
Observability:- The benefits or effectiveness of this feature provided by Revolut will be
observed by the customer when they are about to install the feature as their would be the true
review of experienced users. In addition to this the feedbacks of customers would be presented in
the form of voice notes or videos that are available over its official website that are posted by
customers itself.
These all are the factors that involve within the theory “Diffusion of innovation” which
are required to be consider by Revolut before launching its new innovational feature within net
banking services. This is because, these factors support in determining the level of adaptability
within marketplace (Wolin, 2016). By performing this investigation effectively it has been found
that the benefits and usage of this voice assistance are effective which support in attracting
customers toward this innovation. But in order to work over bringing this innovation it is
essential for Revolut to create a business canvas model that represent the 9 building blocks that
are crucial for starting work over new business or process. These factors are explained below: Key partner: - This section explains about the individuals involved in business and
support Revolut in performing operations properly like IT staff, networking specialist,
project manager etc. Key activities: - It describes about several activities that will be performed by Revolut
after introducing voice assistance feature such as providing tutorial videos, problem
solving by customer assistance, ensuring proper networking (Vargo, Wieland and Akaka,
2015). Key resources: - This production and introduction of voice assistance among customer
requires various resources which includes new technical staffs expertise in IT,
networking, programming, Financial resources, advanced computer systems and other
technical equipments.

 Value preposition: - This section describes about number of actions that will be
performed by Revolut for creating value among customers. It includes Convenience in
operating mobile app, assistance over the user actions, reducing the chance of error. Customer relationship: - It explains about sources used for developing better customer
relationship such as customer support services, self-services, Personal voice assistance,
ease of performing actions (Weisburd and Braga, 2019). Channels: - It explains about channel through which Revolut offer its voice assistance
service to the customers such as mobile application. Customer segment: - This includes the targetted customers of Revolut such as investment
freak customers, not so techno-friendly people and aged people. Cost structure: - It involve sources through which Revolut will incurred cost such as
employee's salary, application management, training to technical staff etc.
 Revenue stream: - It refers to those sources through which Revolut earn revenue such as
customers subscription and usage of voice assistance feature.
CONCLUSION
From the above presented information it can be summarized that innovation plays a
significant role within the growth and success of company as it support in keeping customer
satisfied with their services and dealing with the competition present in market. But in order to
implement innovation effectively an organisation must adopt an effective innovational theory
such as Diffusion of innovation that support in providing a pathways to present innovation in
effective manner among customers. This is because Diffusion of innovation support in
identifying the rate of adoption among the customer regarding a particular innovation. After
getting verified with about the compatibility of an innovation a company must also focuses
toward creating a Business Canvas Model that represent the core building blocks that support in
making a particular innovation successful in marketplace.

REFERENCES
Books and Journals
Bain, D. and Kleinknecht, A. eds., 2016. New concepts in innovation output measurement.
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Bernstein, S., 2015. Does going public affect innovation?. The Journal of Finance. 70(4).
pp.1365-1403.
Berry, F. S. and Berry, W .D., 2018. Innovation and Diusion Models in Policy Research.
In Theories of the policy process(pp. 263-308). Routledge.
Biemans, W., 2018. Managing innovation within networks. Routledge.
DiMasi, J. A., Grabowski, H.G. and Hansen, R. W., 2016. Innovation in the pharmaceutical
industry: new estimates of R&D costs. Journal of health economics. 47. pp.20-33.
Etzkowitz, H. and Zhou, C., 2017. The triple helix: University–industry–government innovation
and entrepreneurship. Routledge.
Gomez-Uribe, C. A. and Hunt, N., 2016. The netflix recommender system: Algorithms, business
value, and innovation. ACM Transactions on Management Information Systems (TMIS).
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Manzini, E., 2015. Design, when everybody designs: An introduction to design for social
innovation. MIT press.
Pisano, G. P., 2015. You need an innovation strategy. Harvard Business Review. 93(6). pp.44-54.
Tidd, J. and Bessant, J. R., 2018. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
Vargo, S. L., Wieland, H. and Akaka, M. A., 2015. Innovation through institutionalization: A
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Weisburd, D. and Braga, A. A. eds., 2019. Police innovation: Contrasting perspectives.
Cambridge University Press.
Wolin, S. S., 2016. Politics and Vision: Continuity and Innovation in Western Political Thought-
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Online
Revolut Launches New Business Mobile App. 2019. [Online]. Available Through:
<https://www.crowdfundinsider.com/2019/02/144691-revolut-launches-new-business-
mobile-app/>./
Security - the way you want it. 2019. [Online]. Available Through: <https://www.revolut.com/>./
REVOLUT CARD. 2019. [Online]. Available Through:
<https://www.choosewisely.co.uk/prepaid-debit-cards/library/revolut-prepaid-card>./