11,000 users, most of whom were friends and relatives of RBS staff, apparently!
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To be fair to Bó it wasn’t designed to have direct debits, it was designed to run alongside a current account.
RBS tried to do something different to Monzo et al.
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From my perspective; i think Monzo needs additional features, something to provide Monzo’s customers with an investment capability in addition to Euro and Dollar accounts.
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That’s quite a niche demand though. I’m not sure it would have that much impact on mainstream market penetration.
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I should have placed money on this, don’t know who would have bet against it though.
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This to me was a classic case of looking at the data and coming to the wrong conclusion.
RBS thought “Monzo and Revolut are popular for spending, therefore we need a spending card.”
But the reasons that the majority of users are not using Monzo as a primary account yet are not because they don’t want to, it’s simply that there is huge FUD around switching and people believe it’s a hassle and that there’s too much room for things to go wrong, which makes them skittish especially when it comes to things like mortgage payments, loan repayments, etc.
A huge amount of people I’ve spoken to don’t know that CASS exists and believe switching would have to be a manual process. The ones who do know don’t necessarily trust it, or believe that it only does DDs and they might not receive their salary or have their standing orders transferred.
Others I’ve spoken to believe that they are required to keep their current account with the same bank that their mortgage is through, due to years of banks cross-selling their products and creating an impression of lock-in.
All of this contributes to a general feeling of it being a laborious process that isn’t worth their time. This can theoretically be solved by cash bonuses, but you then create a problem in that once the cash bonus has proven to them that it’s actually a straightforward process, they’ll simply do the same thing when another offer comes along, and you then have a churn issue.
I believe that incumbents are still underestimating neobanks as spend cards, and that this is short term thinking. All neobanks will continue to close the primary/spending gap over time.
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As usual, I think this is spot on from Simon.
I’d just add that if RBS really genuinely intended Bó as nothing more than a spending card then they’re bigger fools than I thought. If it was a trial play to see if they could develop a new bank (technical stack, systems and culture) in a safe way then I’d have some respect (especially, as I mentioned above, if they’d purposefully failed fast). But if it was a “me too” to cut Starling/Monzo out of the market then that’s laughable.
Agreed, but part of me wonders if the inflection point isn’t further off - with current run rates I wonder if it’ll take a decade for Monzo to be the UK bank.
There’s a broader issue here, I think, about bank/account unbundling. I’ve written before that the direction of travel has to be an unbundling of the current account (so overdrafts from a different provider to your main bank from a different provider of your app etc) - but that’s a big leap for the consumer. And before we even get there, the evidence from on here seems to be that folk are struggling with the notion of an unbundled bank (I won’t go full Monzo because they don’t provide mortgages/credit cards/regular savers/teddy bears) - so some way to go to show that a focused provider on one thing can work, play nicely with other providers and create value for the user.
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Neobanks and money management apps are encouraging offerings in a sector that has been long overdue an update BUT there is plenty more room for improvement.
I think RBS/Natwest got it wrong by setting a target in no mans land… it wasn’t a blatant copy of Monzo or Starling, just with a Natwest name, which imo would have done a lot better than Bo (admittedly not a high hurdle)… OR they should have gone in a very different direction by offering people a financial service platform that does things that the competition doesn’t do, by trying to pioneer new services a bit like Revolut are doing.
I suspect Mettle will go the same way if it is assessed as an independent venture. They will lag behind Tide, Starling and others in the business account sector. The only hope for them is that they can integrate what they do with existing RBS business account customers.
Amazing how the closing down of Bo has gone so under the radar, I wouldn’t have known for a while had it not been posted in here.
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I disagree that switching is easy. It’s easy for us with modern banks and certain knowledge of how the scheme and payment redirection, etc.
If a switch goes wrong with a modern bank it’s relatively easily to fix because you have self-service access to everything but with legacy banks it could very well involve hours on the phone and dealing with letters which makes the operation take several days.
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This pretty much describes me.
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Monzo and Starling user here. As it stands, I will almost certainly never switch to them as my main bank, because Customer Service options are so ropy - notwithstanding the ropiness of my existing banks CS function.
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Recently I was speaking to someone who was interested in the 0% financing option on apple products, but thought it wasn’t available to them using their Monzo as they didn’t have an account with Barclays (who offer the 0% on behalf of apple).
“lock in” is 100% something people think is true.
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I have had Apple Finance without a Barclays account. They just provide the credit, you don’t need an account with them.
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There is lock-in, because Monzo doesn’t report to all three credit agencies. And the key “all three”, it just is not good enough if any are missing. And yes loans / credit / bills payments fail to validate.
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Very few organisations report to all 3 credit agencies - the important thing is that Monzo are now reporting to one of the two biggest (i.e. not TransUnion) - and I would not expect Monzo too
(Though this is getting off topic for this thread)
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Majority of current accounts are reported to all three. Over the years I’ve been with a few big & small, and I can see them all, on all three.
As that is often used for online / instant ID verification.
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First Direct aren’t, as I’ve recently discovered, so I’d infer the same for HSBC. I can check but haven’t yet.
I think this would be a good focus area for Monzo while Plus is on hold. They have done some good stuff with TransferWise and pots, but there’s a whole world of things they need to plug into, and there’s been no update for ages, even on credit cards, which they obviously started. I think, without this, the likes of Emma and Snoop will make neobanks an even harder sell, because they offer a lot of the functionality without having to move.
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What’s the day to day impact of this? Do you guys sign up for credit products every day so having a “prefect” report on all the CRAs is important?
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I don’t but it is an issue for all sorts of things.
These days, KYC rules apply to more than just banking and finance, it’s also other services like utilities and insurance, even auctioneers.
Often, these services have the well-understood need to check identity and address, which can often be done automatically via CRAs.
If you aren’t on even one of the main three, then they fallback to manual verification or even can’t verify your bank details at all. This can, and does, cause problems for people. I think it should be a priority to report to all three.