With the public terrified of the COVID-19 (coronavirus) pandemic, it leaves a space for fake news to fester. Rumours surfaced earlier today on Twitter with people questioning whether UK challenger bank Revolut was close to going bust.
With all that is going on it is understandable people were getting worried about adding banking troubles to them. One Twitter user said, “anyone [sic] with Revolut do u [sic] think i [sic] should move the money i [sic] have on there to my normal bank account I’m genuinely scared they’ll go bust lol.”
One tweeter, who was sceptical of the news asked, “Anyone have any insight into the rumours of Revolut going bust? Just pandemic hearsay or what?”
To this, Revolut responded, “Hey Ruairi, this is fake news. Just last month we raised [$500m] in fresh capital. Revolut is not going anywhere, and your money is completely safe.”
In a further attempt to quench problems the banks founder and CEO Nikolay Storonsky came out with a blog post relaxing fears. “The Coronavirus pandemic is causing unprecedented movement in financial markets,” he said. “Naturally this can be alarming and can allow rumours and false information to spread quickly.”
He went on to explain that the company is a digital, cloud-based company, making it easy for it to arrange for its staff to work from home. It will also be reviewing the situation each day and answering any coronavirus questions people may have.
Finally, he reaffirmed the company has recently closed a $500m funding round. “I want to make clear that for Revolut it’s business as usual,” he said.
While the market is panicking following the outbreak of the coronavirus, it is hard to see why these fake rumours had surfaced in the first place.
The Bank only closed its Series D on $500m in February, a round which put its valuation at $5.5bn. It raised the capital to support its ambitious growth plans including improving its customer experiences, increasing product development, releasing new lending services for retail and business customers and increasing the rollout of banking services across Europe.
Today the bank even launched its services in the US, hardly a move of a company which is on the brink of going bust.
A recent report from Finance in Bold even claimed challenger bank could benefit from the coronavirus. After completing a study, it claimed its user base could grow from 10.84 million users in February this year to 13.07 million by June.
By 2021, it believes the company could even reach 16 million customers. The reason for this is simply down to the fact people may look towards digital banks as governments encourage people to avoid using physical money or to go to branches.
It looks like Revolut was not the only UK challenger bank to be hit with the rumours of going bust. Monzo also face similar fake news. The bank’s CEO, Tom Blomfield, took to twitter to say “Monzo is not going bust. Source: I am the CEO.”
Despite the banks both making public statements of not going bust, fears were still spread, one Twitter user said, “If you have a Monzo or Revolut account, I’d consider taking my money out of it as they are expected to go bust this afternoon. Could [be] a rumour but worth paying attention too!”
It is unclear where the rumours initially began, but tweets suggested messages came through WhatsApp claiming the banks were going bust.
One tweet showed a text message which claimed Monzo had not paid some of its workers for the past week.
Whereas the rumours for Revolut appeared to be related to service issues the bank was facing.
Twitter user JamesTech8 said, “Is it true that Revolut is going bust and is that perhaps the reasons why my account is still on lockdown despite that I provided all the requested documents on the first day! I have more then 13k invested in Revolut stocks and my account is on lockedown [sic] for the past two weeks.”
Several other users echoed similar problems with their accounts being frozen and an inability to withdraw funds.
However, these were not foreshadows of the bank going bust but simply minor technical issues. The bank responded to one tweeter questioning the issues people were facing with taking out money. It’s response said, “Hey, Laura! We were experiencing some issues but all has been sorted! If you will need any help please contact one of our agents through our in-app chat”
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