I think we need to separate out the current banking model in the UK and Monzo’s approach to it.
On the banking model, I’ve said before:
Ultimately, I don’t think banking should be free. It means that cost-effective players like Monzo can’t compete effectively and you end up with a regressive system where those most in need subsidise those that aren’t.
But Monzo can’t solve that problem alone. And, like you say, it needs to turn a profit. My view is that a clear and transparent overdraft fee, with help given to those in need, is a reasonable way to do that in the short term. I’d hope the fee goes down in real terms as revenues grow from elsewhere in the future, though.
But back to the topic, I think that overdrafts are essential for the vast majority in the current banking system - like as we might to change that.