Innovation Report: Revolut, Disruptive Innovation, and Future Growth

This report examines Revolut, a British financial technology company, through the lens of disruptive innovation theory and the business model canvas. It begins by defining disruptive innovation theory, highlighting its key principles, benefits, and limitations, including its focus on customer behavior and potential for lengthy implementation. The report then applies this theory to Revolut's historical development, detailing its mission to simplify financial services, its introduction of mobile banking and currency exchange services, and its overall impact on the traditional banking industry. Furthermore, the analysis extends to potential future development pathways for Revolut, considering how the company can leverage disruptive innovation to further enhance its services and maintain a competitive edge. Desklib provides access to similar reports and study resources for students.

Managing Innovation

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Innovation theory.........................................................................................................................1
Application of disruptive innovation theory in the historical development ...............................4
Application of the disruptive innovation theory in the future development context.................7
CONCLUSION ...............................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Innovation refers to the process through which a product, service is brought up to date
and renewed by introducing new techniques, implementing new processes as well as establishing
new ideas to generate new value. The generation of value is termed as the characteristic of
innovation. Value is defined in various ways like improvement to current products, introducing
the new product and service line and reduction of cost by implementing fast technology.
Innovation management is a sum of all management and innovation process such as change in
business process, organisational innovation, product and marketing to increase the brand value of
company (Bansal, 2021). To define this concept the selected theory is disruptive innovation
theory and business model canvas applied on Revolut. The Revolut is British financial
technology company which provides banking services.
The report highlights the innovation theory and application of innovation theory in the
historical development context. Further, it covers application of the innovation theory in the
future development context.
MAIN BODY
Innovation theory
Disruptive innovation theory
Disruptive innovation theory refers to the process in that a small business with less
resources come in the market to challenge the big and established company by introducing new
start-up, product and services at the lower level in the market as well as continued to move up
and change market. It is the long process which occur in number of steps. It is the technology
which makes expensive products and services more affordable as well as accessible to a broader
market. Disruptive innovation needs facultative technology, a coherent value network and a
innovative business model (Batac and Maymo, 2019). Sustaining innovation refers to the process
of creating or innovating for the improvement of product and services to satisfied the needs of
current customers. For example in Revolut, to apply the disruptive innovation the company
introduce new facilities in their financial services as online payment method, direct money
transferring form bank account from any company as well as currency exchange services to
reduce the risk of carrying cash all the time.
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There are 4 steps to understand the disruptive innovation theory are as follows-
Not all innovation is disruption- The company must use this theory to make changes in
their process of services. The manager have to understand not all the changes are innovation as
well as not all the innovation is disruption. Disruption means the changes, issues which are faced
by the target customers and big companies neglect the requirements of their various other
segments and new target market (Biemans, 2018). The company can use these as opportunities
to introduce new innovation which fulfil the needs of this segments to attract them towards their
company to earn profit and new customer base.
Disruption can be low end and new market- The disruption is two type such as low
end disruption as well as new market disruption. Low end disruption- It is plan of new businesses which come in initial stage of market
and offers services to the customers in a good way which is very effective. The big
company not give importance to this market as when the new business enter and make
huge profit then the big company move ahead upstream and give their full focus and
efforts on that area where the more profit margins are.
 New market disruption- It refers to the companies which emulate against less
consumption in low margin area of an industry. Same as low-end disruption, the goods
and services offered are seen as effective as well as the emerging company is enough
profit at the low price (Bucic and Singh, 2018).
Disruption innovation is a process rather than a product and services- It is not
concerned introducing new product and service, it is related with the process of services as well
as a curing the product and services in fast and effective way. As in Revolut , the company
change payment mode and type by providing the facility of debit card, online payment and
currency exchange to improve the experience of their customers. By using these changes they
can disrupt the current payment process or method of other big companies. As if the company
introduce new financial services they cannot defined it as a termed of disruption innovation.
Choose the battles wisely- Many small and new business come with disruptive
innovative ideas to compete in the market. So the big and established company used it as benefit
and opportunity to understand the disruption innovation and helps the company to generate new
idea or scheme to make improvement in their current product and services to fulfil the needs as
well as demands of customers (Gerybadze, 2020). So the manager of Revolut must evaluate the
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disruptive innovation of many start-up to take it as opportunity for the growth and innovation of
their business.
The benefits and limitations of disruptive innovation theory
Benefits
The best example of disruptive innovation are internet and artificial intelligence the
company who take advantage of fast and innovative technology available in the market in their
process to make their product and services more effective (Havins, 2020). By using many
features and make addition to them the company can make best disruptive innovation in order to
gain competitive advantage and enjoy various benefits in the industry as compare to their
competitors.
The benefits are of the disruptive innovation theory are as follows
Expansion of market- The main advantage to adopt the process of this theory to make
innovation in the Revolut is that it helps the manager to expand their market to a bigger extent
that their traditional methods. Disruptive innovation enable the manager of Revolut to modified
and make changes in the consumer behaviour and buying pattern in regards to the traditional
industries which exist in the market (Jackson, 2019). Initially, it seem as low profitable and
ineffective, but after some time it show the real impact and result on the consumer behaviour.
Improvement of process- It is the modern method of innovation to solve and mitigate
the issues of the customers. The manager of Revolut must adopt this theory in their process to
eliminate the problems of their loyal customer base. Disruptive innovation bring changes in the
evaluation of the company processes as well as provides a method to adopt changes in the
process. It also helps the manager in the supply of better services as well as bring modification in
the current industry functions. It will enhance and modernise all most all the procedure of the
business, that further prove as advantage for the company.
The opportunity for business growth- If the new start-ups and company make
disruptive innovation in the market the manager of Revolut use it as advantage to bring changes
in their current process and make more innovative changes by using their innovation which will
leads to improve their profit, market share and customer base.
Limitations
With all these advantage there are some limitation of the disruptive innovation theory
which the manager need to be considered while implementing this theory for creating innovation
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in the company. The manager of Revolut evaluate the all the necessary steps to determine the
limitation and their impact while applying the theory for the new innovation.
Lengthy and complex process- Disruptive innovation needs a isolate strategy procedure
as well as this procedure must be focused and emergent unanticipated problems, opportunities
and successes instead of focused or intended on improved knowing about the what works as well
as what doesn't work for company (Perrini and Russo, 2019). The manager of Revolut will find
difficulties to make the effective strategy to implement the disruption innovation successfully for
the growth of the company.
Difficult to understand customer behaviour- This theory is focuses customer
behaviour rather than designing new products and services. The manager must make strategy by
keeping the aims of people and customers should make the design of disruption innovations. The
manager of Revolut must conduct all the research related to the demands, needs and expectations
tom make innovation on the basis of that.
Less profit margin-The impact of disruption innovation is very slow as well as the result
of this innovation take ling time which leads to slow in the process of profitability. The
disruptive companies not able to achieve huge profit quickly because of their nature low end and
new market disruption as the innovation of Revolut take huge time to deliver reliable profit for
business. So the manager can not use this innovation for the urgent changes and introducing new
innovation in the market in order to get fast return and huge profit rapidly.
Application of disruptive innovation theory in the historical development
The Revolut is British financial technology company which offers banking and financing
services to the people in UK. The company was estabilished in 2015 by Nikolay Storonsky and
Vlad Yatsenko to bring changes in the current operations of banking industry. The company
provides various banking services such as debit cards, current accounts, currency exchange,
stock trading, insurance and foreign exchange. The company provides these services to the
benefits of customers as it make easy to them to make payment easily by providing them the
facility of foreign exchange. The Revolut also make various innovation to make the process of
insurance easy to save the time of customers. The debit card facility of Revolut also prove
beneficial to the consumers as they can make payment easily without carrying huge cash with
them which reduce the risk of theft and their life. The company also provide stock trading
services and the manager also suggest profitable opportunities to make investment and huge
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profit by it to their clients which build trust among them towards the services of the company.
Many customers experience many benefits by using the banking services of Revolut in their
personal and professional life (Pol, 2021).
Historical development
The main motive and mission of the company is to offer a most simple way for people to
save their time and money for the future needs. The company provide various solutions and
services to attract customers to maximise their wealth as well as provide most effective solutions
for the beginners and new comers in saving, paying and investing. With in few years the Revolut
become one of the valuable and profitable company which provide banking services to the
beginners or new company. The company achieve huge success in less time and attract many
customers towards their services in order to compete in competitive market and make various
innovation to change the old way of banking operations (Puhan, 2019). The main motive of this
company to provide most affordable and fast services to the customer to make their life easy and
reduce the complexity of their busy schedule.
They make easy for them to conduct their business monetary transaction easy and fast.
After globalisation, it makes more complex and long process to transfer money and attract many
company for foreign investment so the Revolut provides currency exchange and foreign
exchange services which helps the many company to operate their business in many countries as
well as they can export and import goods or services by using this facility of Revolut as the
company allow many business to make exchange transactions in many currency as per their
requirement (Sanz-Llopis and Ostermann, 2020). They also launch mobile banking app which
provide services like peer to peer payment, fee free currency exchange, cryptocurrency exchange
in 150 currencies directly by using app through mobile. They introduce new method such as
digital mobile banking to eliminate the draw backs of traditional banking for the benefit of
customers also.
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( Source: The challenge for Challenger banks, 2019)
Business model canvas
The business model canvas refers to the graphic template and model used in strategic
planning and management. The manager of Revolut use it for conducting deep analysis of digital
features, content and operations. The business model canvas with business's activities, key
stakeholders,, resources, revenue streams, cost, selling channels and key value propositions . The
stakeholders of Revolut is Amazon, Apple and many more which use their services to spread
brand awareness online for the huge profit. Various partners are providing rewards and discounts
to customers by the apps to increase the loyal customer base (Szostak, Laviolette and Burger-
Helmchen, 2021) . Many banking company also the partner of company which provides many
banking services in mobile for the convenience of customers.
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Illustration 1: The challenge for Challenger banks , 2019

(Source: Is Revolut becoming the ‘Amazon’ of banking. 2020)
Application of the disruptive innovation theory in the future development context
After globalisation the Revolut earn huge success and popularity in the global market.
The company use disruptive innovation theory to make changes in the traditional banking
industry and market. The awareness of digitalisation payment among youth and new business
creates opportunities for the Revolut to reach the height of success. For the youth and large scale
business the cash is becoming outdated, which is caused by the method crime for cash.
Future aims
The future aim of the Revolut is to make sustainable innovation to attract large number of
customers by updating their current applications with creative features like offering cash rewards
for shopping with Revolut app plus mortgage solution and life insurance. This helps the
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Illustration 2: Is Revolut becoming the ‘Amazon’ of banking 2020

company to make improvement in their services in order to gain competitive benefits and power
for future development and accruing huge market share. In the global market, the common issues
are associated directly and indirectly with money or their exchange. The values of Revolut
require to be more focused on making something more than earning profit. The future of the
company is depending on their current action (Tan, 2020). The manager make various innovative
strategy for the development and decided to implement disruptive innovation strategy again in
order to compete their mission to reduce the global poverty issue. To apply process of disruptive
innovation for the future growth. The manager of Revolut make plan to target 15% of population
and make video tutorial as well as banking education lessons for beginner. By the effective and
strong partnership with many income generating platforms they provide the most effective
solution to this issue.
As the recent trends the dynamic change in digital platforms will continue to enhance by
many customers and industries will be focused on reducing risks, innovations and 4D printing
will make new solutions. As technology advancement and robotising revolution are modifying
the infrastructure and market of the world. Revolut requires to apply those changes and trends to
create differentiation and give effective value to its loyal customers. Effective development for
the business would be generating a new consultation at the mobile of people. They can use 4D
hologram's images for the customers globally as financial experts as well as provide financial
advice to the customer at home. The manager can use artificial intelligence to developed their
services to provide facility to customers and warning them about the risks. They can also suggest
them to reduce the risk associated with the investment as well as give them various opportunities
to increase their wealth and future development (Thornblad, 2018). By using internet they can
search the current trends and technology available in many countries as well as in new market in
order to make most effective innovation in the business to attract large number of potential
customers.
Application of disruptive innovation in future services
To apply this theory the manager of Revolut will use the artificial intelligence as their
personal adviser. Managing individual investments and finances is depends to a large extent of
understanding and knowledge of risk as well as the talent to mitigate them. Computer are capable
in advance to find out the errors and through cognitive analytics they will able tom predict and
calculate risk. The most effective way to offer that make disruption in the market for Revolut is
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to target new segment and unattractive people that is people under age group of 20 to 40 with
needs of mortgage and low credit scores in unsuccessful investments. Providing them the easy
features which helps them to improve their wealth and status as well as the manager warn them
for the risk related with investment. The demand and awareness among customers at both low
and high end market. By using internet and various digital marketing tools the company can
promote their services as well as various new features available for the customers (Visentin,
2018). They can easily spread awareness about their innovation and services among the users for
their benefits and easy going. By this they can easily earn the huge publicity and customer base
which helps them to get competitive advantage to compete with many big competitors.
CONCLUSION
As per the above presented information, it is concluded that the company can use
disruptive innovation theory in their organisation in order to get competitive advantage and
attract large number of customers. The disruptive innovation theory is the process which the
company can use to make changes in the process of traditional function of market as well as to
increase the threat among big and established company. The historical development of the
company is their innovative service which they provide to the customers for earning money and
satisfied their needs. The future development is by using various advantage of this theory the
manager can improve their current services to reduce the problems of new segment and various
customers related to quality or process exist in the market.
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REFERENCES
Books and journals
Bansal, S., 2021. Managing Innovation in CIM Environments. In Designing Innovations in
Industrial Logistics Modelling (pp. 243-266). CRC Press.
Batac, J. and Maymo, V., 2019. Managing innovation: controls and people. Recherches en
Sciences de Gestion. 130(1). pp.267-289.
Biemans, W.G., 2018. Managing innovation within networks. Routledge.
Bucic, T. and Singh, G., 2018. Apple watch: managing innovation resistance.216). IGI Global.
Gerybadze, A., 2020. Technology and innovation management in a global perspective.
In Managing Innovation in a Global and Digital World (pp. 207-225). Springer Gabler,
Wiesbaden.
Havins, S.R., 2020. Decision Support Systems for Managing Innovation Through Project
Selection in Public Sector R&D Environments. IEEE Engineering Management
Review. 48(4). pp.28-31.
Jackson, N.C., 2019. Managing for competency with innovation change in higher education:
Examining the pitfalls and pivots of digital transformation. Business Horizons. 62(6).
pp.761-772.
Perrini, F. and Russo, A., 2019. The Roots of Corporate Sustainability: the Art of Managing
Innovation and Relationships by illycaffè. In Managing Sustainable Business (pp. 363-
394). Springer, Dordrecht.
Pol, E., 2021. The Client-Supplier Relationship in Managing Innovation: Delineating Defence
Industry First Mover Challenges within the Government Contract
Competition. International Journal of Industrial and Manufacturing
Engineering. 15(12). pp.491-499.
Puhan, T.X., 2019. Managing Change and Innovation. Available at SSRN 3371800.
Sanz-Llopis, J. and Ostermann, M., 2020. Innovation in project management through framing
and challenge redefinition. International journal of managing projects in business.
Szostak, B., Laviolette, M. and Burger-Helmchen, T., 2021. Managing Innovation According to
Space, Time and Matter (No. hal-03583613).
Tan, S.F., 2020. Managing innovation: Technology, consumer and sustainability perspective, and
the challenges. In Leveraging Consumer Behavior and Psychology in the Digital
Economy (pp. 205-
Thornblad, D., 2018. Managing Innovation without Managers: Valve Corp. Journal of Case
Studies. 36(2).
Visentin, A., 2018. Managing innovation at firm's level.
Online
Is Revolut becoming the ‘Amazon’ of banking, 2020 [Online]. Available through:
<https://www.linkedin.com/pulse/revolut-becoming-amazon-banking-antish-aubeelock>
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