Monzo isn’t a bank account. Monzo is a financial hub. I want a platform that provides an excellent user experience and that I can use natively for all my financial products. Think of it as the Google app store for financial products.
1 Like
Ah I really REALLY wish this were something I could agree with you on.
2 Likes
I think you want it to be a financial hub, right?
The reason I say that it is one is that I think that there are still lots of Monzonauts that sub-consciously approach app development with a Monzo = spending card mindset. We see that in the skeuomorphic representaton of the account by the card and in some of the copy in the app.
If we get over that, then we have folk thinking that Monzo is a current account. Which is true and all that, but it constrains thinking and leads to a sub-conscious movement towards a (perfectly nice) digital bank - rather than pushing the boundaries and going for a platform play.
So I don’t really think that Monzo is a perfect financial hub now. But if we keep calling it a current account I fear that’s all we’ll get. So a financial hub it is.
Does that make sense?
(Cue new CEO’s new year blog canning financial hub and doubling down on banking)
(I also think it says something that I can’t remember the new guy’s name).
5 Likes
Firstly - you write wonderfully.
Secondly - yes I do want it to be, desperately so. And I can understand what you mean about using the term over current account/bank to encourage it to become a financial centre.
If you went to a pop up market in a car park on a Sunday and there was just one stall there, is it a market or just a stall in a car park?
I see Monzo as the stall in a car park; there’s the potential for everyone to come and set up shop but right now it’s nobody but the one stall.
I think Emma, as I outlined above, has hit the nail a bit more at being a financial centre. Revolut have also.
3 Likes
I’ve never really got on with Emma (the app) but I’m all in on Money Dashboard. I’ve finally got it set up the way I want it, but could really do with some graphs and trend lines.
I’m afraid I don’t really get the Revolut as financial hub model. They seem to be building out their own product set vertically (and in some cases horizontally).
If we go back to the origins of Monzo, I think Tom was on record as saying that the current account was the “attack vector”. Put another way, you need a route into being a hub. He chose being a current account provider.
So what is a hub? For me it’s much much more than Money Dashboard or Emma (or Monzo). It’s somewhere where you can see all providers, click on one, have KYC done in the background, and have an account opened instantly. And this goes for savings, mortgages, loans…
This requires a large amount of unbundling of financial services. And for, for example, building societies to realise they can never “own the customer” and should specialise in largely commodity products that they distribute through other markets or platforms (like Monzo, or perhaps Emma). This also explains why, in the long term, we might see Monzo split into a bank and a customer facing app. But that’s a strategy that I think might be a while off yet…
So back to Revolut, I don’t see this play at all. I see them rebuilding the monolithic “do everything” bank for the digital age. That model may well win out, but I think it’s fundamentally different.
Anyway, who knows if this is still the plan. I hope it is. Maybe someone will tell us soon?
PS
3 Likes
I get where you’re going here and what monzo’s vision is/was but for a financial hub, but I think it’s a bit of a contradiction/clash of focus to be the centre of the hub while also providing their own current account, which arguably should be a spoke pointing our to other current account providers; alongside other spokes for credit cards, loans, mortgages, savings, etc.
However if we are saying that the hub provider (monzo) can offer its own product at the end of one of those spokes i.e. a current account, I’d like to see what they can cook up at the end of other spokes too e.g. credit cards.
2 Likes
I think folk have sort of merged the term financial hub with the definition of a full featured banking platform.
Revolut looks like and acts like a hub in the sense they combine most of the financial products younger folk want in a nice coherent package that you can access from a single app.
The only real difference, as I see it, between Revolut and the style of hub you attribute to Monzo is that with Revolut everything is all their own platform, and there’s little choice beyond it.
I have to say, it’s a model I really like the look of, both in terms of its ability to provide a well built and coherent package of products, and in terms of its ability to generate sustainable revenue streams. It almost feels like an Apple ecosystem of sorts, because the entire ecosystem is built and managed by them.
Monzo, on the other hand would be reliant on third parties or APIs. It would limit their control and freedom, limit their ability to generate meaningful revenue, and be incredibly easy for their competitors to copy.
Longer term, my fear is whilst Revolut offer a nice coherent ecosystem, Monzo would wind up looking like a Frankenstein in comparison.
Personally I would prefer Monzo went down a similar route. A few folk have been saying they don’t want Monzo to copy their competitors and be a me too company, but I think it’s just as innovative to take existing approaches and ideas, and elevate them, iterate on them, improve them, and do them better.
It’s not about being first to implement an idea, it’s about doing it better, in a way that actually matters.
3 Likes
If I were Monzo strategic guru, and the commercials behind a Monzo credit card worked, I’d weigh up the likelihood of getting card providers deeply integrated versus development of an in house card. If a Monzo credit card would contribute to accelerated profitability you’d have to trade that off against long term strategy. You could always divest it later if you needed to.
I think the key to the hub model’s success is that for some spokes you have to just provide your own in house products, other spokes will be soley third parties, and other spokes will have both.
1 Like
There’s a lot of talk about credit cards, and I don’t personally get it. Do people really just want another credit card?
Personally if Monzo are going to expand into products like this, I hope they take a more innovate rethinking towards it and go with a whole new take on the idea behind a credit card.
Otherwise I feel we’ve lost sense of the reasoning for these fintech companies existing. What happened to rethinking the way banking worked?
I’ve seen it in Atom’s kitchen too. An increasing number of folk seem to want these fintechs to now become more like legacy banks in their product offerings and approach. Why? Plenty of banks already cater to those needs. I want these new banks to keep being different, keep being better, and to keep rethinking how a bank should be, that’s better for us, as customers, drives innovation, and shakes up the industry.
2 Likes
I’d quite like to move to a ‘line of credit’ approach. Bank says “you’re good for £3k” and you can use a (credit) card, go into debit (overdraft), transfer elsewhere (loan). Feels innovative and doable. Some regulatory hurdles with Section 75 protection, interest free periods etc, but an interesting space to examine.
4 Likes
This is sort of my line of thinking too. Would be an interesting approach. My favourite credit card right now is PayPal, and it’s not even a credit card.
I think I’d like a Monzo solution to do something similar that could be applied retroactively, or automatically if there aren’t enough funds.
For instance, I buy a new iPad with Monzo, go into the app, tell Monzo I’d like to use credit on that purchase, which leads to a creation of a pot, and sets up an automatic transfer that will transfer the right amount to pay it off in time. Any interest can be deducted from the main account balance.
I think it would be a cool approach to dealing with interest free periods. When the pot is paid off, you can have some fancy congrats animation and archive it. It would make for a good rival to the likes of clearpay, Klarna, and PayPal credit.
Would be much easier to keep track of than my PayPal purchases too, as I can see clearly and choose which transaction(s) I’m paying off.
Such an implementation would sort of mimic the idea behind credit card pots, which a lot of people seem to want too.
3 Likes
Monzo experimented with this a few years ago. Never seemed to go anywhere (and there was, I think, some distaste at the approach). There’s also the credit issue: if you can afford it up front then it’s not quite credit…
1 Like
That’s fair enough, I suppose. Unless an emergency, I don’t really use credit for credit. I use it for section 75 protections, and to keep my money earning interest for a little bit longer.
3 Likes
The central problem I had with the approach is that you could only apply after you made the purchase, which was something of a Catch-22:
- If I need a loan to pay off the purchase, I can’t risk paying for it and being turned down for the the loan, leaving me out of pocket
- If I have the money to make the purchase without the risk of being out of pocket if turned down for the loan, I don’t need the loan
(That is, I second this:
)
2 Likes
I don’t particlaurly want a new credit card to the market or another credit card in my wallet. I do want to replace my existing credit card though with one that would live natively inside the monzo app.
I think this will become more and more prevalant as more and more people become fintech customers. But just because a company offers something new (the tech) it doesn’t autmatically remove the need or want of the old products (the fin).
Sure plenty of banks do offer them, but I want my bank to offer it to me, the bank with the great app. I want a one stop shop.
In my mind Monzo’s main success isn’t their current account, it’s their app and how it displays the account. Their current account isn’t revolutionary so why does their credit card need to be?
8 Likes
I would love to have a Monzo Credit Card probably just because of how well Monzo works to be honest
1 Like
Credit can be helpful for managing finances. For instance, insurers charge crazy money if you pay eg home insurance monthly, but no fees if you pay it all upfront. A 0% credit card gives you the best of both worlds, spreading the cost over the year without the fees.
Of course, it’s an argument for credit generally, but, for better or worse, credit cards are the most easily accessible form of credit in the UK at the moment.
I know various providers have tried to address the above problem with credit directly, but eg Starling’s loan offers are vastly outmatched by what I can get on a credit card… I don’t see what else can provide instant, guaranteed, 0% credit for a fixed term for one-off purchases at the expense of some of the most vulnerable members of society 
2 Likes
I would also be replacing an existing card.
Don’t lose sight of the fact that lots of banking works pretty well already.
Also, I think it’s good to recall the bother that the financial world got into with ever increasingly complex financial products.
Sometimes a degree of complexity is helpful (e.g. pots) but most of monzos successes are about simplicity and transparency (e.g. no pending transactions, instant notifications, no hidden fees, etc).
3 Likes
Or maybe Emma take a lot of Monzo’s aspects. 
1 Like