Revolut Trading Platform Turned Unprofitable: Root-Cause Its First Loss

You are the product manager for Revolut's trading platform. For the first time, the platform's profit has fallen below zero. How would you investigate what happened? ```hint Write the profit equation Break profit into revenue and cost lines that can each be checked against data, find which ones moved, then segment the line that moved before naming causes. ``` ### Clarifying Questions - Which profit is this: trading's contribution after its direct costs, or a fully loaded figure that also carries allocated overhead? - Which revenue lines are credited to trading: commissions and trading fees only, or also currency conversion on trades, interest on customers' uninvested cash and a share of subscription revenue? - Did profit slide over several months or flip in a single period, and how far below zero is it now? - Does the platform cover only shares and ETFs, or other asset classes as well? ### What a Strong Answer Covers - Pinning down the profit definition, the size of the loss and its timing before diagnosing - Ruling out accounting and one-off effects such as reallocated costs or a single large charge - A revenue and cost decomposition, with each component checked against data - Segmenting the component that moved by market, plan, asset class, trade size and customer cohort - Ranked hypotheses with the evidence that would confirm each, and fixes that weigh margin against customer growth ### Follow-up Questions - Suppose revenue is growing every month but per-trade execution costs are rising faster. What would you look at next? - Trading may also bring customers into Revolut's wider product. How would you decide whether a loss-making trading business is acceptable? - Which pricing or order-routing changes would you consider, and how would you test them without driving active traders away?