I had a thought regarding using the API for education, inspired by the recent blog post from @Jonas
I’ve worked with schools and colleges in the past to run financial education activities, but a limitation is always that access to banking services is limited, and so a lot of the material has to be theoretical. Mondo, even in it’s current form, could be an incredible tool for combining coding/development and financial education.
For example, prepaid cards can be issued to 13-18 year olds I believe, so Mondo could partner with a school/college to provide each student with a prepaid card that parents can load with money on a regular basis to pay for lunches/supplies etc. As well as using the contactless payments in canteens etc. it should be possible to use the cards for contactless ID too? (I’m thinking library access etc.) This should improve security, and make the school cashless. Mondo could also provide the school with guided developer activities for use in IT classes, where students can get experience creating real-world applications using their own data. Additionally, by engaging the kids so early and letting them create their own banking apps, I would expect many of them would continue to use Mondo when they leave education and on in to their lives.
I understand this is a bit ‘blue-sky’, but it’s also something that other banks would love to be able to do (have a look at how many run school partnership, workshops etc. as part of their CSR) and are nowhere near being able to at the moment.
That’s exactly the kind of thing I’m hoping we’ll be able to do You can teach both financial literacy and data analysis and some light programming skills at the same time. Imagine a child arguing for a larger allowance because they keep track of their expenses and can prove that they aren’t just spending their money on candy!
During this alpha test we can’t hand out cards to under 18 y/o kids but some form of sub-accounts for family members etc are definitely something we’d like to do in the future Or perhaps something somebody could build on top of our API. In fact, once we allow minors to use cards, the entire program you described could even be developed by a third party on top of our API!
A bit late to the original conversation as I just joined Mondo last week. Osper and Go Henry are 11-18 year old accounts that provide children and adults with a no hassle bank account - we have Osper and its so easy to set up and use compared to a traditional bank account (like Mondo!). Its invaluable if your child lives away from home. They’re both helping children learn to become responsible for their money, earn pocket money through tasks and parents and family can pay cash birthday presents too. Go Henry have already moved into the School Bank market, especially as it turns the school ‘cashless’. Good news for Mondo is that plenty kids and parents don’t know about them yet!
I’d like to add some weight to this. I am a lecturer in ‘Web Technologies’ at a University in the UK where we cover a whole host of things ranging from design to front-end and back-end development. Part of this is covering the creation and consumption of APIs, and having access to the Mondo API is something I feel our students would really engage with. I’ve shown a number of students my card and app and there reception has been overwhelmingly positive.
As a University we can’t expect students to top-up a card/account and make transactions, and so realistically a ‘test console’ or similar which allows dummy transactions to be created in a sandbox fashion would be required. However, I expect many students would be eager to obtain a card and try out the applications they are creating in a real world.
I would be very interested in talking to someone at Mondo about the opportunities here as/when it might be feasible.
Hi James, thanks for chiming in and sorry for the tardy reply. A proper test environment with full-featured transaction simulator and debugging tools is definitely in the works. It may be Q2 or Q3 this year but it’s coming!
I would certainly support he development of a junior a/c. All 3 of my children have accounts for 11 to 18 year olds. These accounts offer a debit card, but the online banking is not available. Whilst the app is ok with Barclays, they have all seen my Mondo app and wanted to sign up straight away.
I’ve just set me daughter up with a Go Henry account - this is a great site to see what a children’s account needs. I’m really impressed with it - and she is thrilled. A :mondo: version would be excellent.
Get used to it. Monzo will probably have to charge as the interchange fees are low and they won’t make much on the current account float with current interest rates.
Well, I wish them luck with that. Monzo’s only able to hold £50k deposits under its limited licence and can’t use the money on the cards. So it can only do overdrafts when its got sufficient deposits to be able to lend against them - they need a lot of stable deposits (not money on current accounts which run down during the month) to be able to do that. That will only happen if they succeed in persuading the regulators they can manage people’s money - maybe 12 months away, and get a full deposit taking licence (and also credit licences). Then there are capital and liquidity considerations that a full licence bank demands - these are quite onerous. Monzo will probably have to offer higher rates of interest (like Atom, at these times on nearly negative deposit rates of interest) to attract those deposits, yet remain competitive in the overdrafts market, which will depress the margin (which allows them to operate). They could borrow on the wholesale markets, but they are new so that might be expensive. And, of course we’re talking about pre-approved overdrafts, not unapproved where banks charged penal rates and fees. Yes, up to 25% of Brits overdraw halfway through the month and they represent a higher credit risk (usually living beyond their means, anticipating their salary - making them a higher credit risk), this will also require extra employees (fixed costs) to manage the customers (it not all done by an algorithm) and as they don’t have loans to switch/refinance hardcore overdrafts to manage the credit, then that could be tricky!
In summary, there’s not much money to be made (anymore) from pre-approved overdrafts. So I think they’ll have to charge for the bank account, and probably a monthly fee for the overdraft - just like other banks. Or change their product roadmap.
So :mondo:'s expecting to get their banking license in Q1 / Q2 next year. As for offering interest on current accounts, I’ve not heard that being mentioned but they do have the right to purchase bonds with deposits so maybe they will. Or they may just rely on the vastly improved UI & availability of overdrafts to draw customers. No doubt Tom will explain more in his blog. They will be charging the for the overdraft but a fee for the bank account with no additional value added services wouldn’t be competitive or appeal to the target market…hopefully Tom’s figured out a viable business model. But this is part of the fun with start ups right? It’s interesting to hear your thoughts on this too.
Don’t understand why Monzo would purchase a Bond with a deposit as a Bond is a form of loan. Could issue Bonds, but not sure of appetite from an unknown and unproven business. Monzo can draw customers, but they have to offer them more than a nice UI - and Tandem, Atom, Starling and others are all competing for the same limited pool of customers - all offering the same thing! Will be interesting!
Just to explain, I mentioned bonds becasue they pay interest, some of which can be passed onto customers. My understanding is that that’s usually where, at least some of, the interest that you receive for your current account at a high street bank comes from.
Obviously the success of any startup isn’t guaranteed but more than anything, I have faith in :mondo: because of their approach, they’re taking best practice from tech start ups (open API, status page, this community, app first etc.) and applying it to banking. It’s difficult to judge Atom, Starling & co. so yeah, I’m looking forward to seeing how this works out too
UK’s going negative interest rates, which means that banks may charge customers to hold their money (maybe that’s the answer!). Monzo don’t have any term/fixed deposit products to get and keep deposits long-term (for 12 months plus) and current account balances are only good for overnight as they are ‘on demand’ (we can withdraw at any moment and are currently held by the card provider, not Monzo who can only hold £50k deposits in total). Not a strategy…
I thought of this the other day and I’m glad to see someone’s already raised it, though with the new funding round approaching I’d like to Monzo doing more in this area. Delivering social value should be at the forefront of many businesses’ objectives, especially when they’re trying to fix broken industries.
There’s an opportunity to teach a whole generation how to manage their money anew.
You can teach both financial literacy and data analysis and some light programming skills at the same time. Imagine a child arguing for a larger allowance because they keep track of their expenses and can prove that they aren’t just spending their money on candy!
