Monzo: a serious risk of a bank breaking out

The bank of the future becomes the bank of the past.

https://www.ft.com/content/2f9a7ee5-0773-3bd2-ad8e-85e138e93f07

What does it say, you have to pay?

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Because the Financial Times is a paid publication.

Google the title and you’ll get it free

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If you Google the title of the article, which is the topic title here, you can often read it for free. I think you get so many per month or something.

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It says that Monzo’s early stated strategy was to be a marketplace - which in his definition meant it wasn’t really a bank. But now that they have a current account and loans, they’re basically a classic bank.

Weird semantic acrobatics going on there. I wasted my time so you don’t have to.

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You didn’t mention the flawed and slightly bizarre loss leader argument

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Thanks to those that gave advice. Google’d it and found it. Don’t know how I feel about that article.

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The article is quite tongue in cheek but they do have a point. Tom and the team set out to re-write the banking rule book but have gradually conformed to it.

They did originally say they would need to conform to overdraft lending in order to reach profitability and then pivot towards a marketplace, so other lending isn’t really a huge change to that gameplan.

I do hope they can reach sustainability eventually and then switch it up to a full marketplace model, or at least show us all the competitor options alongside their own offerings.

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I always thought banks made their money off deposits.

They do, as long as those deposits are loaned out to other customers :wink:

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They could also invest them? :slight_smile:

Invested in loans to other customers :slightly_smiling_face:

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After thinking about it, I agree with this. I think they are making a storm towards profitability which is fair enough but I hope Monzo don’t lose sight of what we want in a bank too.

This isn’t strictly true - they earn interest from the Bank of England on all customer deposits.

Not strictly true either as they don’t take the money from anyone. They use deposits as reserve to issue brand new money

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Gawd bless the FT, and gawd bless you Dan for doing what you do best

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