In their current form and app style I don’t believe they want the affluent market.
No bank really rewards customer loyalty, bar NatWest and their £5 giveaway last week
Not sure what else Monzo could bring to the table.
To add, does Monzo want people to just park thousands and thousands into investments/savings or do they want people out spending for fees and interchange fees etc, assuming the former for the wealthy who are most likely more sensible with money.
I suspect the Monzo model changes as the user base changes, if and if is doing a lot of heavy lifting, there is a big wealth shift as the boomers die and it goes to Gen Y and X, then that’s Monzo sweet spot, and the product reacts.
at the moment, the core demographic needs good budgeting tools, and places to sensibly invest and save, and that seems like it’s the right fit now
if we accept this is true, here’s a thought experiment: Monzo wants to maximise revenue so launches a new brand (like Smile and the Co-op, First Direct and HSBC…)
I think, on balance, that’s probably my preferred outcome. What would this brand look like?
Be focused on the mass affluent - roughly those earning 65k+
Come with wealth management tools - net worth etc
Have open banking bundled for free
Offer a credit card like Flex but allow for 3 to 6 months worth of interest free installments
Have exceptional customer service - phones that are answered immediately and with people that can fix problems (think FD in its prime) and responsive, insourced people behind chat with a policy of addressing issues first time rather than passing them about
Individual ETFs available for purchase rather than defined funds. No fees.
Agreements with early stage VCs or Angel collectives to offer (S)EIS funds at lower values and reasonable rates
Provision of lombard loans
Mortgages (including offset) - either directly or through partnerships with building societies
This feels pretty compelling to me. The maths might not work, but for this it might be worth exploring:
A basic tier of having your salary paid in, direct debits out etc (money comes from the significant net interest margin that would be held). Alternatively a small (say £3) monthly fee.
A mid tier, perhaps with longer 0pc offers (or rolling some of the propositions above into it)
A high tier, including insurance and extras targeted at the market.
This wouldn’t be Monzo, but a sister brand working on the same technology.
I think they rely on the reputation of the main brand though.
First Direct may have a different market but you know it’s backed by HSBC.
The reverse… I mean if I’m affluent and used to HSBC Premier I don’t think I’m moving to a brand backed by Monzo. For many it’s still a risk (I know it’s not really, but I think once you start getting into assets of £100,000+ your risk appetite tightens)
You can do a ‘premier’ tier within the Monzo brand and feel, it just doesn’t have to be a separate product as such. The tradition banks love to segment their customers and staff by arbitrarily putting wealth/salary levels in, where I’m open to having a base product and then adding what I need. I’m in that mass affluent market, and find the Monzo offer right for me, but I accept I might be an outlier
From a personal experience, my mum has just got HSBC Premier, she’s got £100k+ in savings, and she’s found a lot of the product a bit meh, she’s loves the easy to access GP, but found that all they want to do is sell investment products to her, she’s in her early 70s and doesn’t see the benefits as the money needs to be liquid quickly.
I feel there’s a mix of wanting better credit offerings vs a premier style platform.
The app could have an overlay in its current form, neat, black, less rounded edges and more professional block cut corners, remove emojis and other “fun” style behaviours. Keep it neat and “mature”.
That would be my Monzo, with a black style card and silver Mastercard branding as previously created by @davidwalton but I am a few quids off Premier for any bank except Lloyds (which I wouldn’t mind paying for a nice perk).
Then there’s a better credit offering, for a longer term/increased revenue style customer - which is ok to want, are there banks that offer such exclusive card terms for affluent, or is it more your AmEx centurion type you’d be looking for?
Anecdotally I do think you are an outlier - but that’s not a bad thing!
Also with a 70 year old I imagine it’s very different to someone who is 30-40 with the same wealth. They are (I imagine) far more likely to want a premium bank with various offerings and a reputation that keeps them in the brand.
I did Mainly because I’ve had various ‘Premium’ accounts in my life and none of them have been worth it, IMO. My HSBC Premier is still open (despite not meeting the requirements, although I could if I wanted to) but I don’t see any reason to use it over Monzo.
I mean, for sure it’s not going to be something nobody does; but I don’t see a market on a financially viable scale.
I can absolutely see folk who are perhaps older who have wealth but don’t really do much with it choosing Monzo. There may be a market there but I don’t think Monzo has the reputation to bring over a lot of older folk who notoriously may never have changed bank in their lives.
I prefer keeping my savings and investments with separate institutions so that I can get the best rates. If HSBC offered competitive ISA interest rates and better investments I might consider moving back.
That’s my mother She’s been with Midland Bank (which HSBC eventually acquired) since she and my father got married and now has an Advance account. She’s been offered Premier a number of times by them but she just doesn’t want to change.
I think we all know that in the grand scheme of things you’re not the norm! So many people just have one bank and that’s it for everything.
It’s the everything that people want - a bank that just has everything in one place. I’d hazard a guess that people don’t even look or care about interest rates and investments!
If you do care then you’re wanting the best rates, best customer experience and best customer support with the best reputation, I would imagine.
Go for it, Monzo. I just think it’s an uphill battle.
Monzo could reward loyalty by offering a premium tier with perks like zero investment fees, higher savings interest, metal card, and flexible spending. Mass affluent users might benefit from a separate “premier” or “Select” product, similar to First Direct/HSBC Premier.
Yeah I do think I’m unusual in the Monzo customer base, plus working adjacent to financial services and what’s going on probably skews my views in some ways
although a lot of the affluent wealth I know, then to plumbers and builders who have Monzo accounts for their businesses and related current/joint accounts for life, be interesting as that group get more wealthy if AI eats my kind of job, how they are cratered for
Having briefly used a Barclays Premier account I didn’t really get any extra benefit from it compared to my “normal” current accounts and it’s certainly not anything I’d want from Monzo. Although maybe that’s simply because the Barclays app experience was just dire….
Mainly because I’ve had various ‘Premium’ accounts in my life and none of them have been worth it, IMO. My HSBC Premier is still open (despite not meeting the requirements, although I could if I wanted to) but I don’t see any reason to use it over Monzo.
