I’ve been using Monzo for a few days only on android. I’ve enjoyed the experience so far and I believe the future is really promising for you.
As you’re now becoming a full certified bank, I assume that one of the future sources of revenue for Monzo would be to lend money to people/companies and profit of the interest.
As we know, in our current money system, banks have an extreme power to “create money out of thin air” by lending it to costumers. Obviously in the normal high street bank this money is mainly used for non productive investments like inflating house prices, the stock markets, etc, in search for the quick buck but also inflating the bill for the future generations to pay without living a better world for them and here is where I think Monzo can really be a game changer.
My idea is that Monzo could provide us with a set of industry sectors (clean energy, biotechnologies, green transport systems, etc) that we would select once every year in a poll for example, for the money we’ve deposit to be lend to and you would compromise to lend it to companies in those sectors rather than using it for the not so good reasons I’ve described above.
As Monzo grows, this would help putting money into productive investments that would create jobs and improve the quality of living for all of us, rather than making life even more difficult for all of us.
I know some complications can arise and I might not have all the answers, but I would definitely love to discuss the idea as I think can have a great impact. Let me know what you think.
Jonas (co-founder of Monzo) lists the different ways that Monzo could make money, in this Q&A session from a presentation that he gave recently.
Answer from 16 minutes onwards -
To summarize, the options Monzo’s considering are:
Depositing money in the Bank of England’s overnight account
Purchasing gilts
Lending 10% of deposits as overdrafts
He says that Monzo will make enough money to be profitable from the overdrafts alone.
He’s then asked whether Monzo will invest deposits elsewhere later on & the answer is that Monzo wants to minimise the size of their balance sheet so rather than lending the money themselves, they’d prefer to connect customers with other lenders.
Since Monzo’s customer base will be consumers (Monzo’s product is it’s current account), my understanding is that it won’t be lending money to corporates either directly or indirectly (through referrals) in the foreseeable future.
This could potentially be a minefield of controversy. What’s perfectly a morally acceptable investment for one person may not be for another (e.g stem cell research, designer DNA, even something seemingly harmless as robotics or cybernetics).
Things that benefit everyone however, such as national infrastructure like road and rail maintenance (not new links) and fibre optic broadband, gas, water and electricity supplies, could all be sound investments.
Given Monzo’s reputation for its transparency to its community, I’d expect nothing less than full disclosure of where my money is being invested in if this were to ever happen.