Interesting MoneyWeek article about how crowded the online banking space is becoming

I came across this article, which I felt was worth sharing. In the author’s opinion, there’s too much money flowing into the online banking space, and only a a small number will survive.

It states that “not everyone can build brand recognition” - which is something at which Monzo has to date been very successful.

Definitely worth a read.



Bit of s nothing article. Isn’t this how any market works? New tech allows for new business models. Companies swarm in, most fail, some succeed massively. Rinse and repeat.

The amount of investment is just an indication of how big the potential rewards are.

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I think it’s worth sharing. A lot of people get caught up in the hype - so I feel it’s always worth at least taking onboard a view that not all will be rosy.


Sorry bud. Didn’t mean to be dismissive of your post.

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No problem. As an advocate, who’s also invested in every available crowdfunding round until now, I sometimes feel it’s useful to read an opinion that’s less optimistic - just to get a sense of balance!


There’s one vital mistake in this article and it’s here:

Banking is fundamentally quite a dull business, and more of a chore for most people than anything else. The new web banks are going to struggle to get anyone very excited about downloading their new app. Even if it does have some new features, they just aren’t going to be terribly exciting.

Banking is not exciting, but what IS really really exciting for a lot of people is financial stability. Not going broke! Not living in a state of panic that some bill will come in that you can’t cover! Paying off the credit cards! Being able to afford a house or kids or a reasonable retirement! Having your small business be financially sustainable!

That’s just immensely compelling and anyone who can sell that successfully is positioned to absolutely clean up in this space.


My biggest issue (aside from the lack of depth to the article) was the phase “web banking”. The internet isn’t the web which isn’t apps. :man_shrugging:


Not sure if agree, @ashby.

The features you list are more about being the least we should expect. The exciting bit will be about innovation - the tools the banks put in-app to enable us to achieve your aims.


I find that stating something like “Banking is a dull business” to be quite reductive. You might also say that “a media streaming platform” is a dull concept, and yet people love Netflix and Spotify, just like people love Monzo.

It’s about solving human problems and helping people lighten their mental load. It’s about understanding that payments are inherently social and actually facilitating that in a modern way.


I think the trick would be to have a more flexible, borderless account, interfacing between different countries more effectively is where the focus should be, experiencing how disjointed economies can be I think true freedom of trade should be supported by your bank.

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I agree, though I suspect the point the author was trying to make is that most MoneyWeek readers would have grown accustomed to thinking that banking is a traditional and dull business - before going on to write that while there’s room for it to be shaken up, it’s not yet clear which banks will be the winners of that shake-up.

It is clear that while other banks have toyed with features such as card freezing, none felt many of them were worth delivering, until Monzo came along and created a popular expectation of such features. It is clear the incumbents are responding. The question is whether they can learn to be sufficiently nimble to compete - while leveraging their huge scale.

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