Disagree with this. All the challenger banks are competing amongst themselves to attract customers from the high street banks, as well as from other challenger banks, and so they are in direct competition with each other for those customers.
Also disagree with this. If one company builds a really great feature/functionality for their app which solves a problem and causes a load of people to start using their app and not Monzo, then it would be silly for Monzo to not at least consider creating something similar (or, ideally, something which solves the problem in a better way) or they risk losing customers and potential customers. So Monzo do build features/functionality beacuse other companies build them. Just look at how similar some of the stuff all the tech banks are doing (eg: Monzo’s new categories look very similar to some of Starling’s categories).
There’s a far bigger pool of high street bank’s customers to go after than other challenger’s & it’s much easier to win the former over. It doesn’t make sense to try to compete with the other challengers right now, in my opinion.
Several thousand people are signing up to Monzo every day so people leaving to use the other challengers because they offer different functionality, isn’t going to make a dent in Monzo’s user numbers.
I completely agree that all the challenger banks should focus on getting customers from high street banks. But this still means the challenger banks are in direct competition with each other in getting these customers (like I said in my previous post).
For example, if a current high-street-bank-only customer is considering switching to a challenger bank. They are more likely to switch to the challenger bank with the best features/functionality, so the challenger banks are in direct competition with each other for these potential customers who are switching from high street banks.
Market awareness of the challengers is so low that I doubt that a high proportion of people who do end up using a challenger are aware of the others so they don’t end up comparing them. If they do find out about them & go with someone else then, as I mentioned, it’s not going to make a dent in the overall number of signups.
Also, one challenger always has things that the others don’t & vice versa. None of the challengers should be copying features just to maintain parity because that’s impossible to achieve, if they end up developing the same features anyway because they’re going to add the most value to customers & potential customers then great.
While all of our opinions are fine, as Monzo themselves claim the big banks as the competition (from their recorded public statements on the topic) and are presumably concentrating their efforts in that direction, I find that a fairly compelling argument as to who or what they’re reacting to in the marketplace.
What it doesn’t mean is that everyone has to agree with them!
Isnt there a quote out there somewhere saying how its better to retain a customer than gain a new one?
Well thats how i feel here, i have less loyalty to monzo as a challenger bank because they have no physical branch or i dont personally know the staff or anything like that.
I love what the “challenger” banks are doing now though and i am going to go with the one that has the best features and offers the most bang for my buck. At the moment monzos starting to lag behind and if that continues personally ill have no qualms in moving to revolut or starling or someone else.
As much as the higher ups at monzo are trying to stress they arent in competition with them, they 100% are and should be worried
The problem we seem to be hitting more and more on this forum is that each customer (me included) takes their own thoughts and feeling and applies them to all 600,000 of us.
This is mine and a few of my monzo mates opinions, some have starling/revolut accounts as well as monzo in order to back the winning horse per say and they are leaning more and more away from monzo as being that horse at the moment.
Would it not be best to keep accounts with multiple banks and use each one to how it suits your needs? I do this with legacy and fintech banks. Monzo may appeal to me as a daily use card but others may not like it and prefer to use Starling/ Revolut/ other legacy banks because they may prioritise things like overseas transfers or the interface better.
If we insisted every single bank had the same features how would each bank stand out? Each of the mentioned fintech banks/ companies have a different focus at the moment and they would appeal to different users. Just because I use Monzo most at the moment doesn’t mean I want to throw away all other services or say they are entirely useless. Features are always developing/ being added, if I closed an account somewhere out of spite I would lose the opportunity to test a potentially cool feature in the future.
That’s just my two cents- it’s good to have some competition to keep the drive for innovation there but I’m not going to be spiteful and say “there should only be one bank! 1!1!! everyone should only use Monzo, because I like it best!!” when the market is big enough for everyone.
I think the forum is a valuable place for collecting feedback, but we need to remember that there are numerous ways in which Monzo gets user feedback (in-app, surveys, emails, etc.) and a lot of the people on the forum are people who are very familiar with fintech and might use Monzo differently from the average user. I have 5-6 friends who own accounts in fintech banks and guess what- they use it like a normal bank card. They have no interest in participating on forums and only care that they can look up transactions easily/ everything works/ they can easily contact CS. They rarely go overseas too. It’s sometimes frustrating when I get excited about a feature, but they don’t care about how cool or revolutionary I think it is.
Yes, Monzo has made a pledge for transparency, but we don’t know every single aspect that goes into building a feature or other internal reasons for decision-making. Oh yes, remember the ATM charge vote? A lot of people were unhappy with how that result ended up- wisdom of the crowd may not always be the best option. Tom opted for a different choice as well but they ended up honouring the community’s decision. It is such a feel-good factor when we think our opinions hold some sway, but the onus is on the staff to make sure the company is successful- decisions should be left up to them. If they followed every single suggestion, the company would be directionless.
Maybe this defines me as a ‘Monzo apologist’ to some people but I want to state that I don’t agree with every feature added, but I don’t immediately throw out my card because I don’t have the perfect bank with 300 features. I also have a preference for things I want right now, but that doesn’t mean it is the same for everyone else eg. I know a lot of people are waiting for joint accounts/ 3D secure, which is useless for me.
Just to add to this. Copying competitors features, just to maintain parity with them, can actually be detrimental, as well as distracting. Monzo can see what others have built but not why so creating these features can create technical debt (stuff that has to be undone before more changes can be made), as they might not anticipate what change is going to be made to the feature next or how that feature will link to others.
To use an easy example, Pots are pretty basic at the moment but the team has hinted that they could be used to enable:
Users to give other people access to a pool of money that they don’t 100% trust (e.g. flatmates contributing to bills)
Users to give people access to a pool of money that they do 100% trust (e.g. something that works in a similar way to joint accounts)
Children’s accounts (a parent funds a Pot which the child can spend from)
Carers for people with mental health conditions (to give them visibility & control of a Pot)
Third parties to pay into / withdraw money from Pots, for integrations
Unless you anticipate all of those use cases & make sure that the design doesn’t hinder any of them, you can end up with a difficult problem to unwind, which could cost you far more than you gained by copying the competitor’s feature
I really enjoyed that, it was great to see how you approached the question & it’s really useful to have that framework for this discussion
Given that Monzo wants to be in this set of successful challenger banks, it is important to ensure that we get things right and we should not allow ourselves to fall behind other challenger banks. In this regard, people might call other challengers our “competition”.
Following on from my earlier comments about not trying to maintain feature parity for sake of it, I’d be interested to hear what your metric(s) are for gauging whether Monzo is keeping up & perhaps, how Monzo should ensure that it does so?
It is my view that in 2028, there will be several challenger banks with a large enough customer base that it will be worth competing with them to obtain customers
This is an interesting point. I agree that this is inevitable in some markets, if Monzo’s to reach it’s goal of having a billion customers. But since reaching that goal will require global expansion, I wonder whether Monzo will be competing for market share in every country that it’s in or if there will only be certain markets that become ‘saturated’ with challenger banks?
In other words, how many countries can Monzo conceivably expand into & are there enough to ensure that it’s not competing with the other challengers, who will presumably be it’s toughest competition? Possibly not an easy question to answer..
It would be the wrong strategy to focus our efforts on acquiring customers from other challenger banks because the gains (even in the best case) are tiny, and it would also be a distraction from our implicit goal of moving banking into the 21st century (a goal shared by other challengers).
I totally agree. My opinion is in line with @kieranmch and his blog is really similar to a talk I gave last week. Stay focused on the high street banks, I am sure we have gained a few from TSB in the last week!
Interesting that one of your reasons for not seeing other challengers as a threat at this time is that they have much fewer users. I wonder if you flip that around and look from their point of view then that makes Monzo the competition for them - a challenger with many more users to tempt away?
It would certainly explain some things like 1-star review spam, hijacking of social media threads, trolling on forums, registering domain names maliciously etc.
It is such a feel-good factor when we think our opinions hold some sway, but the onus is on the staff to make sure the company is successful- decisions should be left up to them. If they followed every single suggestion, the company would be directionless.
