Inspiration for Humanitarian Banking 9.0

[Santino]

Hi fellas.
Simon from Sweden here
Your project does really have the potential to become something bigger.

I just joined your community and hopefully i will become a happy user of your app in the near future too. As a humanitarian it’s important too me that ‘a new kind of bank’ really proves that it is a new kind of bank so therefor i have a some questions regarding your view on the future. Functionality and transparency are great but so is your values.

1. How do you vision the lending work? How will users be able to lend? From each other or from you as a bank?
2. Will Monzo be working with interest?
3. Many of todays banks treats their customers differently. “Premium services” Platinum Card" etc etc. What is your thoughts on that? Will you treat your customers/users differently depending on the amount of money they have in your bank?
4. What is your thought on a Commercial Bank VS an User Owned Bank?
5. What is your thoughts on the Bitcoin-currency to remove inflation from the equation? What do you think you can learn from them in order to “change” banking for real?
6. In terms of future what do you think would be the best approach: Above the central banks or part of the central banks?
7. What do you think about built-ins Gamefication when it comes to banking and sustainability?
8. Except for providing top quality functions and 100% transparency how do you think you can step up the banking game and change the world even more in the future?
9. In terms of owning “I made it, it’s mine”, “I found it, it’s mine”, “It was given to me, it’s mine”… What do you think about Ownership in general? Just curious.
10. If you could reinvent the whole economic-, monetary- and banking system from the bottom. How would you do it? And what can you learn from that insight for the future development of your service?

Big questions i know but maybe you can find inspiration for future features when trying to answer them. I would however appreciate them big time!

Thanks in advance!

[alexs]

Hi Simon

These are some interesting questions, my only concern is that if Monzo takes the time to answer all of them, they won’t have time to build a bank

Here’s what I know (this should be quick) -

1 & 2. Overdrafts will be Monzo’s first product, they’ve explained their vision for them here & discussed how they should work in practise here. If you search the community for @paul / @venkat / @luba you find some more info from the team that’s working on them too

.3. One way that Monzo will treat their customers more fairly is that unlike the legacy banks, they won’t rely on punitive charges to fund their current accounts. As you may know, these charges mean affect the less well off (the people who need to use overdrafts & will potentially end up going into their unplanned overdraft) the most. While those who have a positive account balance pay no fees at all…
Rather than offering premium service - I don’t know if that’s something Monzo are considering but it seems against their whole approach - Monzo wants to do the opposite. Jonas (one of Monzo’s Co-Founders) has said that he wants Monzo to be able to provide their current accounts to the unbanked, by the end of the year

.4. Monzo is a commercial bank but as you’ve probably noticed, they have invested a significant amount of time & effort setting up crowdfunding campaigns to enable customers to invest, as part of each major round of fundraising. Having said that, it looks like there simply aren’t enough users to entirely fund Monzo, with it’s current business model so they’re having to raise capital from private investors too

.5. My concern with using Bitcoin to avoid inflation would be the massive volatility of the currency. That has a far greater impact on the value of money held in Bitcoin, than inflation does on pounds sterling

.6. Monzo has a banking license so below the central bank. Regulation makes this a necessary constraint & also helps protect consumers

.7. Monzo already uses gamification - Targets are one example & I love it

I’ll leave the biggest questions to Monzo

[nobankercol]

These really are some big questions. If you are looking at how to design a more secure, balanced and (to some extent) more ethical banking system, then you could do worse than looking at Germany’s “three pillars” - composed of private commercial banks, public banks and cooperative banks.

Regarding Monzo’s contribution in the UK, I am an optimistic supporter. Nevertheless, whilst I appreciate there are technical complexities, I find it a pity that customer crowd funding for this next round has been restricted to a little over 10% whereas pledges are approaching 50%.

BTW, alexs: may I say I always value your considered and helpful contributions.

[alexs]

Thank you

Nevertheless, whilst I appreciate there are technical complexities, I find it a pity that customer crowd funding for this next round has been restricted to a little over 10% whereas pledges are approaching 50%.

Just to pick up on this - I understand where you’re coming from, the demand doesn’t seem like a big surprise to me & I’ll be disappointed if I don’t manage to invest this time around.

But when I spoke to a couple of members of the Monzo team at the open office about how well it had gone, they did seem genuinely relieved & they obviously hadn’t been 100% sure that they’d hit the target. Hopefully this means that next time, they can be more confident!

[nobankercol]

Modesty of expectation is always endearing

[nathanvoller]

Hopefully this means that next time, they can be more confident!

I sure hope so!! Almost at £10 million now! The chances of my pledge being successful are getting slimmer and slimmer @alexs was there any indication to when the next crowdfunding would be?

[alexs]

was there any indication to when the next crowdfunding would be?

There’s just this, from this round’s investment deck -

Card Availability Geo-limited, don't hold your breath!

Further geographic expansion depends on the availability of capital. By 2017, our UK banking authorisation should allow us to operate acrossEurope under our own licence…

But since Monzo have done interim fundraising rounds before, we know that the need to raise more capital doesn’t automatically mean more crowdfunding so I’m not going to get my hopes up it would be good though!

[Santino]

Thank you for your reply @alexs ! Much appreciated.

Well todays banking systems sucks so I guess this isn’t a game changer after all. Just another commercial bank.

I’m wondering with all this technology we have today why can’t anyone think bigger than within the box?
I understand why you have to work within it in the beginning but thats where the values and the future vision comes in. What is your goal?

Todays issues with lending (look at the US Debt for example). Todays issues with a built-in inflation in our system. Abnormal resource management (even the Golden Standard managed it better). The policy around FulltimeEmployment which regulates the economy (The more we work the more we can lend). Self-interest in commercial banks. etc.

These type of issues needs to be fixed because Resource Management today where resources is converted to gold and gold is converted to paper and paper is converted to digits doesn’t hold up in the long run.

Yeah i know maybe these things are to big for Monzo but you can atleast have a vision to do it in the long run.

[billinghamj]

It’s also worth keeping in mind there is apparently an EU-level limit on the amount of money a company can accept through crowdfunding. They mentioned this during the open office. They said the limit was €5m - not sure whether cumulatively, or per year, or something else. If cumulative, the previous round and this round come pretty close at £3.5m.

More info: https://www.finextra.com/newsarticle/29008/fintechs-success-raise-questions-about-eus-crowdfunding-limits/retail

Looks like it may be raised to €10m, so that would be good news for one last round in the future

[MIROW]

IIRC it may be raised from €5m to €8m not €10m

[alexs]

Yes Crowdcube’s more recent comment on this said 8m so perhaps there was a compromise here -

Announcing Our £22m Investment Round and Crowdfunding!

Here’s the details on the limit which is 5m Euros - http://blog.crowdcube.com/2016/12/08/new-eu-rules-pave-the-way-for-larger-crowd-rounds/ It looks like that limit is due to be increased to 8m.

[Naji]

Some big questions here Simon! Some of those I hope we can demonstrate in our actions much more powerfully than explanations. The Transparency Dashboard we launched earlier today for example should give some good pointers as to the things which we feel are super important and our vision of the future. I think @alexs has given some pretty good answers I’ll add a short extension of a couple of these.

How do you vision the lending work? How will users be able to lend? From each other or from you as a bank?

We’re still figuring this out properly! We plan offer overdrafts once we launch current accounts, and in the longer term support P2P lending too. In terms of things like mortgages and loans whilst we won’t offer these services directly, we will via a marketplace integrations

Will Monzo be working with interest?

Again, we’re still figuring out the specifics, but on overdrafts, yes. Head of Lending Venkat and Luba have been conducting interviews with users in an effort to work out the more preferred way of charging for this service.

Many of todays banks treats their customers differently. “Premium services” Platinum Card" etc etc. What is your thoughts on that? Will you treat your customers/users differently depending on the amount of money they have in your bank?

We’ve no plans to tier our products or services for different users in this way. We want support an inclusive and accessible approach banking as far as possible