Competitor update

(Richard Müller, Consultant) #125

I had a look at their website and it not loading properly at the moment but gives their ethos and their target groups such as freelancers and a form to provide your email address to get on their mailing list

(Alex Sherwood) #126

Their last tweet was in August 2015 too…

Also -

after thinking long and hard about this we decided that the best way to launch our bank would be to not create a bank at all. Instead, we want to partner with an existing one.

We have a list of potential suitors we feel would make a good match (contingent to a sizeable dowry) based on the following:

  • We provide: the brand, product and entire user experience catered to a segment we understand
  • They provide: the accreditations, accounts, customer service and ability to issue a debit card

That was not going to happen :grimacing:

(Ben Green) #127

Lol, ok maybe they’re dead, or at least just a smaller competitor then.

(Alex Sherwood) #128

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

( related to Monzo CEO, Investor in Monzo ) #129

Would Monzo users be willing to pay for a premium service if it was offered - but weren’t forced to and would be able to chose to stay with “standard” service ?

(Richard Müller, Consultant) #130

agree with you there :grin:

(Alex Sherwood) #131

This is more or less the same card with the same features in the N26 app, but it comes with insurance coverage from Allianz.

Judging by Tom’s recent comments on the panel at LendIt USA (1:40 onwards) I don’t think he’d be in favor of establishing that sort of partnership, in order to offer this service to customers.

His concern is that banks don’t offer the best deal to customers when they provide these services because they know that the customer’s unlikely to leave, due to their own inertia.

The problem is they’re [cross-sold products] never the best, most competitive products because you reserve those for your new customers, to attract new customers in.

If Monzo enables users to request quotes from multiple insurance providers instead, through Monzo, then the user can choose the solution that’s best for them (& Monzo still earns revenue by taking a referral fee from the chosen provider).

The other benefit of that approach for Monzo is that it removes an incentive for customers to switch to another bank because another bank’s account offers an add on (like insurance), that is better than Monzo’s.

I would happily pay a fee for extra value added services but I’m not sure exactly what they’d be.

(Richard Müller, Consultant) #132

Yes I would seriously consider any premium offering depending on if a monthly charge, an annual charge, or charge when cards issued or reissued.

(Richard Müller, Consultant) #133

Adriano of Partners & Co says:

"Juno was an exercise ­that we created as a ­case study for our co­mpany - Partners & Co.­ The aim was to show ­our thinking and use ­it as tool to engage ­conversations with po­tential clients.

We received so much d­emand that we conside­red actually launchin­g it but the financia­l regulations here in­ the UK are just too ­rigid."

(Ben Green) #134

They’re still listed as a startup in places which is what misled me :rolling_eyes:

(Alex Sherwood) #135

When it comes to the technological challenges caused by regulation, Jonas mentioned that he doesn’t agree with this recently, at a talk & Oliver had this to say a couple of days ago on Hacker News

>[user comment] what really limits most financial institutions from embracing a lot more modern tech is their core systems of record AND the acceptance of said systems by their governing agencies.

[Oliver] I just want to say that I think there is a huge amount of FUD about how you can and cannot build your technology as a regulated entity – and in particular as a bank. In reality, close to 100% of requirements from a regulator will tell you what you must build, not how you must build it. Even then, especially in terms of resilience and security, they are almost always a subset of our own requirements.
What can be more of a challenge is convincing an auditor that what you have done is acceptable, since it can be so different from what they may have seen before. Again, I don’t think this is a reason to compromise. We see technology as a major competitive advantage, so it is worth the effort to find open-minded auditors, and spend time to explain and demonstrate how (and why) our software meets the requirements.
I don’t think there’s any way we could build a secure, resilient bank with the kind of product experience we want, AND do it on the budget of a startup if we approach technology through the same lens as existing banks.

(Richard Müller, Consultant) #136

IMHO the only hurdles are having sufficient capital/liquidity and decisive management. Insufficient liquidity/capital and indecisive management are what will prevent success

(Richard Müller, Consultant) #137

that is the joy of the internet, out of date and inaccurate information being retrieved, requoted and republished without further verification. Nobody seems to go back and edit or remove out of date articles nor find a way to stop them being indexed by search engines

(Saveen) #138

N26 has continually impressed but I have to say the N26 Black card sounds like a step backwards.

To quote the TechCrunch article…

This is more or less the same card with the same features in the N26 app, but it comes with insurance coverage from Allianz.

…in the context of this:

Banking’s more human face
The new challenger banks have built their brand identity on a bedrock of transparency and simplicity. There are different ways that the challenger banks are achieving this. An important foundation is having a transparent business model and avoiding imposing unnecessary fees on customers. For example, Monzo (formerly Mondo) has promised not to have any hidden charges and instead plans to make money from its future lending business. Monzo has taken its commitment to transparency further by actively engaging with feedback on its community forum as well as publicly displaying a product roadmap to inform people of future features to be released. This is a small yet effective way of breaking down barriers between consumers in a sector where people are usually distrustful of the inner motives of banks.

I’m not sure how flogging the same product with travel insurance tagged on and badging it as a premium Black card is in keeping with greater transparency. Customers are being charged €5.90 per month with a one year commitment ie. around £63 (presumably subject to age, medical conditions etc.).

I’d much prefer to see services such as Allianz’s travel insurance included as an optional bolt-on within a marketplace of products and providers - which seems to be Monzo’s approach.

(Richard Müller, Consultant) #139

Metro Bank have announced today they now support Apple Pay and have already started receiving emails asking when Android Pay is coming :wink:

(Saveen) #141

Launched today, 10x Banking will provide banks “with a new core digital banking platform” combining software applications with a cloud infrastructure.

The new platform It will offer software for products such as mortgages, credit cards, loans, savings and current accounts; and uses API technology to bring systems together into a single network.

“Our core digital banking platform, based on advanced data modelling and database design, will allow financial service providers to develop a much deeper understanding of their clients, cut costs and deal with regulation.”

Although 10x seems to be focussed on providing services to other banks, it is one to watch.

I have been advised that the ex-Barclays CEO is in the middle of raising a £120m seed round!

(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):

(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)

(Saveen) #144

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


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.