Biggest threat to Monzo in 2019


Out of curiousity why do you have Starling and Revolut, why not just Monzo?

What is it about the other two that means you still use them even if not for your salary?

(Jack) #98

IMO the biggest concern over the next 12 months is increasing the % of customers that are “full Monzo”.
I understand their plans for revenue fall largely onto the marketplace concept, this benefits if it has access to seeing what you currently spend as a comparison.

I don’t see growth or any other competitors being an issue, even though legacy banks are adding similar features it’s always going to be a game of cat and mouse.

I think international expansion is an important one especially for the USA. It would be great if Monzo were one of the first to launch there out of the European fintech’s but who knows what the timescales are for this. If they are one of the last I wonder how it would impact growth? Obviously it shouldn’t hinder what they are doing currently.

(Nathan) #99

Personally I have Starling because of the no limit to foreign withdrawals and now free cash deposits (useful once get rid of legacy)

Also I suppose a part of me still expects it to get closer and closer in the next year so id like a foot on both sides of the fence for now.


They will converge more as time goes by, but in reality they will both be UK banking powerhouses. I feel as though they will have different overall functionality and will be used in tandem by many, to take advantage of the close competition and rapid innovations.

Each bank will offer up new perks and additions keeping a close eye on the other for inspiration. Ultimately it will come down to customer support and loyalty, which is massively influenced by customer service. The customer is king :crown::sunglasses:

(David) #101

The biggest threat I can see, from reading this thread, is too much of a focus on stuff that may be relevant to people here but which is utterly irrelevant to those outside the bubble - i.e concepts like “growth”, the “competition”, or being some “leader”.

Just because you don’t have the most customers doesn’t mean you’re not the best bank for me. And these very forums make clear that public engagement can be a double-edged sword - very easy to get a warped impression of what most people are thinking through the typed comments of a minority.

I have Starling and Revolut accounts. I have First Direct and Smile accounts. I have accounts in three other countries. I keep them all and will continue to use them all. Barring a major malfunction Monzo remains my go-to account and I very much doubt my other banks care or notice that this is the case.

Keep on doing what you’re doing.

(Ramadevan Ramachandaran) #102

I agree with this statement. The crowdfunding was flawless. The server handled it well.


Thanks Ramadevan. Just realised I forgot TransferWise too!

(Ramadevan Ramachandaran) #104

Absolutely. The countless time I transferred money from the UK to Malaysia, Singapore and USA . Good customer service too

(Tom Halloran) #105

I’d say the biggest single-issue risk might be a severe hack or data breach. While Monzo is pretty established to folks on this forum, it’s still pretty new and adventurous to most people. The fear that their money wouldn’t be safe with this new shoreditch upstart would put a lot of people off - both from signing up, and existing users going full Monzo. (To be clear I don think this will happen, I’m just saying the impact if it did would be substantial)

Second I’d say is competition from the big banks copying all Monzo’s features, e.g Barclays recently releasing freeze your card, merchant information; HSBC have savings pots now. We know here that the big banks are years behind but each copy threatens to gradually close the gap in user experience and plays into people’s natural lethargy to switch banking services. (Personally I think Monzo will continue to be successful at out-innovating the big guys, e.g. shared tabs this week)


Judging by the email, notification, feed message, red highlight dot and item on the top of my payments tab that I’ve seen/received in the last week about getting £10 for a referring a friend, it’s not adding enough customers.

(Shreyas Zanpure) #107

Monzo’s biggest challenge is going to be scaling as they take on more customers. I personally believe that they should start same offers as legacy banks. Switch to us and get £100, provided you switch all direct debits and standing orders, and maintain £1000 in your bank minimum at all times. Having lots of accounts with low to no balances will hurt Monzo. After all, every account that’s dormant is occupying a tiny bit of infrastructure and a bit of time from customer support. That can’t be free since Monzo has to pay their employees. I do not know the numbers, but I will not be surprised if the total account balances go up if Monzo starts offering interest rate on current balance (rather than just on pots). Clearing out customer services queues by doing cross-team effort is great, but can you sustain it?


I think that is very true.

(Only available in amateur ) #109

People constantly switch for the bonus and switch away, it doesn’t build loyalty. Having £1000 balance is not going to create a product that works for a lot of people


If Monzo offered this great deal next year and onboarded 5million users, that would cost them £500million.

( related to Monzo CEO, Investor in Monzo ) #111

why would a dormant account create a customer service queue ?


I dont feel it would create a customer service queue but it would cost to maintain account.

Though someone that wasn’t using Monzo very much or as there main account may be more likely to put in questions about the app


I’m full Monzo and love the app, it’s incredible. The biggest threat I see is:

  • Lack of international expansion

I read the prospectus and saw that international expansion was mentioned in passing. Obviously it is important to become profitable in your home territory and it’s much easier to do, but the groundwork for US expansion will take a long time and I feel it should be a big focus.


I’m not too sure if this is actually a threat at all? Don’t forget banks have worked for thousands of years before it was easy to open your bank in 20+ EU member states. They were profitable still.

Monzo need to work on their product before they start expanding countries. Imagine running a service and you’ve released 1/5 of that and you expand to America, you’d retreat like 7/11 from the UK.

Monzo are missing:

  • business accounts
  • credit cards
  • loans
  • a solid way of making money that isn’t just onboarding customers

Why would they expand when they’re simply not ready? I’d rather a company take time to develop a pretty good product that works in their domestic market and makes them good money on the customers that take the product choices, and then try and apply that to foreign markets. They can then tailor specifics for different markets.

We also have to remember putting expansion in this prospectus would be silly since its not very easy to get past regulators.

They could say they want to expand to for example, America, but what if the regulator tells them to shove it and come back after X, Y, Z. It takes time to expand into new markets - Revolut had a hard time hiring, so did N26.


I agree with what you’re saying.

Monzo have very good reasons for not expanding that we don’t have access to.

Loans are there, business accounts will probably take a couple of years and maybe they will become profitable soon.

It’s something else, though. It’s inertia.

If you’re focusing on one market you’re building systems for that market, how you structure your systems, teams, regulations and business will be focused around that market, when you enter another market you can’t just tack on “USA” team or “EU” team. The whole business has to shift in its thinking.

I don’t really know what it is like in Monzo. But I have experienced a lot of large software businesses.

Those that do not have that agility and forward thinking built in from the start, will have a hard time changing the organisation to a new way of thinking. In which a US customer is as important as a UK one. A German speaking customer who has different expectations in banking can be aligned with the overall platform goals.

This is the hardest part of a platform approach and that’s why, to me, as one of Monzo’s self stated goals of being a platform for a billion, it is the biggest risk.

(Jordan) #116

I can see why “not expanding” into international market(s) quick enough can be seen as a risk/ possible point where Monzo just stop growing. I would say however to remember how long it took to get on the ground and running in the UK (and still not profitable yet). You have to deal with the licensing, marketing, ensuring that the product works for that ecosystem. I know that the UK has a very modern and forward thinking banking economy/market however the size difference is just huge when we talk about America.

Monzo is still a small fish in a very very large pond - all the big clearing banks in the UK only have some form of standing in the likes of America/ Europe and these are the guys who can produce business accounts, mortgages, credit agreements etc. Furthermore, the big guys are usually a big conglomerate of lots of larger and smaller providers that they have picked up on the way to form the overarching group.

I think that maybe dipping the toe and running a very small pilot of say pre-paid cards like back when Monzo was in BETA could make for good market research, but would be at a great cost which would overall lead Monzo to further losses. Overall I think Monzo should continue to innovate in the market where they have a foothold and begin to become profitable.