Competitor update

(james_e_bell) #142

Still, interesting to see what doesn’t work for future reference :slight_smile:

This reminds me of a lean startup testing technique I though was interesting - ‘picnic in the graveyard’. Thats a method of generative testing where you look at companies/startups who tried your idea and failed and then look into why they failed (or get in touch with them and ask if they will share learnings):

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(james_e_bell) #143

I saw this earlier - its an interesting (and probably inevitable) development. I agree with Monzo’s position that technology (and their core banking) is a competitive advantage. I think the existing banks recognise their positions of strengths and weaknesses (e.g. strength: cash, existing userbase, ‘trust’, brand, weaknesses: agility, technology, legacy systems and processes)

If the banks see their own delivery capability (as well as technology) as a position of weakness then its actually better to acquire a new core/test it from a partner rather than build your own. I suspect many of the banks will be considering this and are watching to see which emerging cores are proving the best.

This will be an interesting existential question for Monzo in the future. Should they consider selling/leasing their core banking system to other banking providers? (a pivot ala business model canvas where you look at different business models from your assets). If yes, lease the core then should you also sell data insights?

Edit as another thought occurred to me - in a way, I think a more interesting challenge to traditional banks than what core/experience/data insights layer they use is what will happen to their actual financial products (e.g. savings accounts, investment accounts, mortgages, loans). Monzo’s vision as a marketplace bank is that it will open up to specialist providers who provide the best product - what will banks do? I suspect we might start to see more packaged together products offering more benefits than individually going to providers (e.g. trying to make a better case for why you should have your mortgage, savings account from the same ‘provider’ as competition against a marketplace)

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(Saveen) #144

Today’s news: Virgin Money revealed as 10x’s first banking client:

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Plus they introduced a 1,7% fee for non Euro ATM withdrawals on all but the Black Card.
Used them as my main account, but will switch now to another bank

Hope Monzo will introduce a Euro account soon, living in Euroland, using a GBP card feels a bit unstable.


(Alex Sherwood) #146

They’re working on it…


(Alex Sherwood) #147

Tandem just launched

A couple of highlights -

The startup will launch the app in waves to 10,000 early adopters

Users will initially be able to add any existing UK bank account to it. They can then monitor their spending and will receive suggestions as to how they can save money, stashing their Tandem’s own savings account, its first financial product.

So another app offering these ‘solutions’ :grimacing: but at least they have products to offer

Tandem’s own current account, loans and credit cards will also soon follow.

I’d still rather have a choice of all provider’s products.

It has raised £22m

Then some incorrect figures for no. Monzo users

Monzo was granted its banking license in August with imminent plans to launch a current account in the coming months. It already boasts more than 30,000 beta users of a pre-paid debit card

(it’s actually over 65k now so the speed of growth is picking up :thumbsup:)

But CityAM didn’t allow me to post that comment & link :pensive:

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Number of Monzo Users
(Bruce) #148

Got my email notification from tandem. Still need to wait for an invite and access starts in early 2017


(Saveen) #149

Following on from @alexs’s post about Tandem, this Finextra article also mentions Loot, which

has just closed a further £2.5m funding round and intends to open to a 20,000 strong waiting list of prospective customers next week.

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(Alex Sherwood) #150

Wow where did they come from? I’ve never seen them mentioned but they already have a pretty well developed app & it looks like they got started less than 12 months ago :flushed:

Only thing I can’t see is a mention of an open API…


(Saveen) #151

@j800rob spotted them :eyes: back in July.

Bold comments from their founder/CEO:

Purdue believes Loot has an advantage. The startup has chosen not to apply for a banking licence, instead using an E-Money licence and partnering with other companies to offer banking services.

Purdue says: “Financially it doesn’t make sense. We’re so much faster, so much cheaper to run. From a compliance perspective it’s no different. We’re working on products you would expect a bank to do because we can use other partners to do that.

“Out of the challenger bank world, we’ve got the most functionality. We’ve got our own sort code and account number system so any user can make a payment to anyone in the banking network. We use Faster Payments. We’ve got direct debits. We’ve got savings accounts as well built in. We call it Loot Goals, you add a savings goal and then we’ll tell you how much money you need to put in each day to reach that goal.”

Loot raised the £2.5 million from existing investors SpeedInvest and Global Founders Capital. Both are European (Austria and Germany, respectively) – did Brexit affect fundraising?

The EU vote “actually made it a stronger case not to go for the licence,” Purdue says. “Even when we hit scale next year, we still won’t because it financially won’t make sense. Monzo and Tandem have spent millions on getting this licence that doesn’t give them any extra functionality than we’ve got and probably can’t go through Europe. It’s pretty crazy.

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(Alex Sherwood) #152

Ahh ok, we can ignore them then :laughing:

Interesting to have a benchmark for the pace of development when creating an API & applying for a banking license vs when you’re not.

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Another firm with an E-Money licence that seems to be doing well is WeSwap. A MasterCard for travellers where you buy money off each other rather than from banks or exchange bureaux. They are currently crowdsourcing further expansion thru Seedrs.

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Loot is apparently political:


(Leon) #155

I like loot more after reading that then I did before.

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(Alex Sherwood) #156

Interview with one of the co-founders of Atom -

Which explains how different their business model is from Monzo’s for the latecomers, like me. It’s also a great example of a new bank trying not to sound like a legacy bank & completely failing (in my not so humble opinion).

A couple more stats, to put the numbers that have been mentioned in previous comments in this thread in context -

Atom has:

  • Raised £135m of capital
  • About 250 full time staff

(james_e_bell) #157

Loot’s arguments against not holding a banking license seems quite strong to me? Are they really at a disadvantage by not being a bank? If they can build a current account experience on top of another banks current account is that a disadvantage at all?
Edit: presuming they build on top of a ‘new age’ banking stack rather than a legacy one - however I’d assume there will be quite a few ‘new’ banking stack as a service provider within a few years.

On a sidenote - Wirecard is killing it in the market - every startup seems to be using them. Looks like they are the platform for a lot of innovation (I hope whoever came up with their platform approach gets some recognition!)


:newspaper: The New Banking Landscape [interview with Paul Rippon]
(Alex Sherwood) #158

Here’s a pretty big one, from their website

The Prepaid Card is an electronic money product and although it is a product regulated by the Financial Conduct Authority, it is not covered by the Financial Services Compensation Scheme. No other compensation scheme exists to cover losses claimed in connection with the Prepaid Card. This means that in the event that Wirecard Card Solutions Ltd becomes insolvent your funds may become valueless and unusable and as a result you may lose your money.

I’m guessing that there’s also a limit to how much they can take in deposits too / what they can do with that money, due to regulations.

I was actually going to point out that being tied to Wirecard doesn’t seem to be a particularly good thing. Following your point, they appear to be the best processor for startups.
But we’ve seen the issues that Monzo’s had because of them (the minimum wait of 3-4 months to enable Apple Pay, as one example & outages as another) so once Monzo is no longer using their services, there should be a lot of benefits.

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(james_e_bell) #159

Ah I had thought from Loot’s vision they still intent to move away from Wirecard to a bank infrastructure that is covered by the FSCS but maybe I misunderstood.

If there is a bank that would allow such a model (they run the banking infrastructure whitelabeled on a modern banking stack) then it might actually be a competitive advantage to not be a bank yourself (e.g. the ‘bank marketplace’ isnt even a bank at all its just an integrator)


(james_e_bell) #160

A joint spending management account (similar to has been requested on Monzo in ideas before):


(Daniel White) #161

This is what I’d really love to see from Monzo. We have (soon to be had) a Tesco Bank joint account for our ‘spending money’ and would love to use Monzo but at the moment we’re using two separate cards and playing ‘whose turn is it to pay’ based on whichever Monzo card has the most dosh left on it!

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