Would like to second the charitable giving / crowdfunding. For example to crowdfund for a good cause on JustGiving the fees are 2.9% and 25p per donation! Can surely shave some off that. I notice facebook are doing the charity fundraiser for people’s birthdays. This means you need to input your bank details to facebook. I don’t feel comfortable doing so but I’d defo donate via Monzo. Great for CSR and revenue.
This means that the only big provider that offers an offset mortgage / current account is First Direct. They could do with some competition!
What’s the solution?
Monzo offers offset current accounts using the Coventry and YBS’s banking licences.
The offering is identical to the standard Monzo offer - including fees and charges. The only differences are a) the small print of who holds the money (and offers FSCS protection) and b) that you can create offset pots.
The balance in your current account - and any offset pots - would then offset against your mortgage. Which would be fully viewable and manageable in the Monzo app, too.
What’s the benefit to Monzo:
Charge the building societies a management fee for each account. Say £10/month.
The marketplace / financial hub model is proven and builds itself.
The building societies advertise their mortgages - and contribute to Monzo’s growth while Monzo is getting paid for it.
What’s the benefit to the building societies:
No competition issues - they’ve already left the market for current accounts (because they can’t keep up with the competition)
Monzo can almost certainly service current accounts cheaper than they can themselves
They can (finally) offer a product that is digitally native and is an integrated mortgage / current account solution.
The service cost to Monzo will be offset by the additional revenue / greater take-up of these products.
What happens at the end of the mortgage term?
Monzo becomes the hub to remortgage with the same or different supplier.
Offer the customer the ability - with a simple tap - to transfer the current account to the balance sheet of different building society or back to Monzo itself.
I think bringing back Offset Mortgages could be an interesting venture for smaller players. However, I do wonder why they were scrapped (although not entirely) by the larger players in the first place.
My guess would be that the idea of “savings” and having a large amount of surplus funds in an account to be able to offset is more of a luxury now - or at least we don’t see as large of funds sat in an account.
Also as we are now in a comparatively low interest rate (as compared to the relative height of offsets) in terms of the consumer would that money not be best served elsewhere? (I suppose it is on a sliding scale).
What I would really like to see from Monzo (completely selfishly) is to help the first time buyer without demanding a percentage of equity that will just be lost to the consumer.
Now I’m not really sure how Monzo could play this - but I think as a demographic the first time buyer is ripe for the taking.
I’ve seen some mumurs about a 10% of the Value of the Property being secured by way of a second charge over say a parent’s home - although this in itself is slightly tricky.
Maybe a mixture of say an Offset Style Mortgage but pre-Mortgage. So you open an Account with Monzo and your target is say 5-10% of the property value - if you hold this savings account for X years and then get a mortgage with Monzo you’ll receive some sort of incentive for doing so - could either be some cash back upon completion or a higher rate of interest whilst saving (to reach the deposit amount)
In the UK Liverpool, Glasgow and Newcastle have rapid transit but it is in no way as extensive, in fact if you add them all together there’s less then half the amount of track and stations when compared to the Underground and Docklands.
Monzo aren’t at world domination level yet, so I just can’t see how cities outside of the UK would be beneficial to the majority of the Monzo-using populace.
I don’t want to snipe down the idea entirely, it really is a novel idea, but that’s all it is.
I want to see Monzo make the ultimate joint account for flatsharers! Kind of like a shared tab but literally a separate account that everyone has visibility on. Currently joint accounts can only be made between 2 people. I get the concerns about joint responsibility etc, but I think there must be some clever ways to make that work for everyone. For example any bank transfers/withdrawals need to have the in-app consent of another person on the account, but bills etc are fine. Or a list of approved recipients or something consented to by everyone. My housemates and I currently pay our rent/bills into a separate account in my name and they don’t have visibility on what’s going on in there, just paper statements. It would be so handy if they could easily access the account and organise paying the cleaner or get in touch with the bank if there’s an unusual transaction - currently it’s all on me. Just an idea!
I’ve just agreed an offset mortgage with CBS yesterday so I’m hoping nothing has changed overnight! I think they still offer it but perhaps they don’t offer it on Fixed Rate mortgages? I’ve elected a variable product.
It’s a really interesting idea though. I wonder if building societies have the necessary tech chops to make it happen though.
Not entirely sure whether this belongs in the serious or joke suggestions but here goes…
Monzo could monetise their cult following by producing/commissioning limited edition collectors items and selling them to the growing minority of users who will pay to own iconic & limited memorabilia
I think what @Slayer1551 did with the 3D printed Hot Chip replicas, or what the guy (sorry, can’t remember your name) did with the smart pig-e bank linked to the Monzo account - that was just the tip of the iceberg and Monzo could actually make that type of thing a revenue stream.
Also they could use those keepsakes in the same way that CompareTheMarket do with their Meerkat plush toys - eg. Complete a CASS switch to Monzo and get a smart pig e-bank or hot chip replica This would add another dynamic other than word of mouth or cash bribe.
And as we are all supposedly ultra stressed millennials. I think they should do hot coral Avocado stress balls.
EDIT: and hot coral hoodies so when we have our first cult meeting of the year the times will know who we are
You don’t have to satisfy everyone all the time, at the same time or be equitable with releases. The company is based in London as are the majority of it’s customers. The demographic and size of London is a perfect market to target feature releases and then expand when the concept is proven.