What confuses me currently (and I’ve felt like this for the last six months) is that I no longer really understand Monzo’s decision making.
I’m Monzo user 585 so I’ve seen a lot of changes over Monzo’s history and the vision at the beginning was a compelling and simple one; build a modern bank on the latest infrastructure that is scalable which in turn would allow Monzo to do things that existing high street banks couldn’t do - pursue a hub and spoke model (Monzo marketplace) connecting with other companies and charge commision.
At the time when I went full Monzo there were several competitors on the market offering a roughly similar proposition. I chose Monzo because of their ethical stance and how much they valued the community. It seems like the value that Monzo places on their community has waned recently with either the following happening;
a) We are told that our views may not be representative of the wider Monzo user base
b) Updates on big projects seem to fall off and the community is left in the dark despite being told otherwise.
Covid-19 is clearly challenging for the global economy. Unfortunately people are getting sick and dying and health of employees should be the number one focus for any company in a time like this. That being said, the impact that Covid-19 has had on the economy was coming in one form or another; pandemic, bubble being popped or any other black swan event that was inevitable with the stock market having been at lofty valuations for a long time now so Monzo must have had plans in place for something like this.
I completely understand Monzo’s decision to not roll out the more holiday centric version of Plus. But the version for budgeting - to not roll this out when at a time like this people’s finances might be squeezed and when Monzo’s revenue is under pressure due to less interchange fees, doesn’t make much sense to me. In my view, during a crisis like this is when people at other banks need Monzo. Other banks who will cream them on overdraft charges or savings rates or any other way they can and it’s in this time when people are at home that I’d be trying to pick up as many customers as I can and certainly not inhibiting people’s ability to access customer support at a time when it might dearly be needed.
I just want Monzo to get back on track to what made them such a compelling proposition. Logging in and seeing my balance sheet in the app due to integrations with Stock Brokers, Mortgage Lenders, Savings Accounts, Student Loans, Credit Cards etc and then to give me valuable insights into what I should be doing to maximise my financial position. “James you have £10 left this month, click this button and we will put it in a savings account/use it to pay off high interest debt” or whatever it might be.
The people at Monzo are phenomenal, the company you have all built is phenomenal, but in my opinion your competitors are sneaking ahead of you in their overall proposition. At the moment it’s Loyalty and faith that you get back on track that’s keeping me a #fullmonzo user.
My feeling on this, beyond the commentary from Simon’s other post is:
They’ll need to advertise new Plus in some meaningfuly way - requiring financial investment (maybe not wise if we’re facing recession), and may come off badly in PR for Monzo if they push adverts during a pandemic.
It will likely require an investment in resources to manage internally too - wether in server costs, staff costs or something else - again given Pandemic & Recession there is probably a view to protect those costs, and minimise additional spending.
It’s possible the impact of an economy in recession changes the projections for the return on the project - and it may not see profitibability from this project as they expect.
All that leads into a position of “protect the core of the business and spend less money”.
I’m speculating heavily, but for context, the business I work in - food and drinks manufacturing sector - has just cancelled a lot of things that would likely launch in the next 9 months - mainly focused on similar points above. But with food.
Why? Theyve got to 4 million customers because they focused on the product and let the customers do the advertising for them.
I think thats what monzo has lost, that connection to the customer and focused too much on the £££. Things like savings pots etc aren’t user friendly, removing easy access to chat isn’t user friendly
Add to that theyve thinned themselves out too much in terms of attacking us/business accounts at the same time when so much is still to be done on personal accounts.
Lack of polish on things is a common theme and while it was cute when they were churning out features every other week and was ok because we had the feeling theyd come back to them, now we know they wont so its frustrating.
Also when your looking at forloughing staff and potentially having to lay them off, spending on an advertising campaign may not go down well internally. What if they spend a million and it doesn’t pay off that’s a lot of salary money gone
I think in general some of us kidded ourselves that monzos new platform, with no tech debt, bringing lots of stuff in house like payment processing, gave Monzo an unassailable edge.
What’s actually happened is that others have seen Monzos success and had a wake up call, some are big banks with huge resources to throw at things and have been able to get close enough to some of Monzos features like card freezing
Other startups have taken slightly different paths, eg not worrying about being a bank, focussing on other niches, releasing different features some a bit jumping on latest trend, some genuinely useful to many
Monzo somehow need to retake the initiative, how I dunno. A feature race isn’t great (can lead to lots of half baked features, easily imitated), having slickest UX is hard work but imho worth it.
Perhaps Monzo need to work with others more, the whole financial marketplace idea. It would be for instance quite easy (I imagine) to have an integration with price comparison which appears when you book a flight etc. Perhaps instead of building all the budgeting they could partner with YNAB or similar, maybe for same for savings and investments (and Monzo can sidestep lots of regulations and firm filling for ISAs let someone else do it)
And how are people that are now unemployed/struggling going to feel about a notification that they can get holiday insurance for a holiday they aren’t going on and can’t afford to eat at the moment, let alone give £10 a month to Monzo?
On a more general level, I feel what you’re describing is how start-ups come in and disrupt the market, and the market stabilises.
I think we’re facing that now.
Startup comes in, targets a niche or need state that is popular.
Rapidly gains popularity given lack of direct competitors.
Other new start ups come in and join the trend.
Eventually, the incumbent companies try and catch up and shift their focus to what Challengers are providing.
Plays out similarly with Netflix, or Uber, or Deliveroo to some degree.
Netflix offers convenient streaming at a low price point, challenges Cable companies.
Netflix takes a huge chunk of the market
Hulu, Amazon Prime, countless others eventually get in the game.
The original companies then try and recreate their own - on demand HBO, iPlayer, Disney Plus etc.
Netflix becomes as big as the huge incumbent companies, and the market somewhat normalises.
I guess we’re seeing the same pattern with Fintech right now, with traditional banks playing catch up. Not sure what my point is now. But I think what Monzo are facing into is that trend of their innovation slowing (due to their increased size), and the market catching up.
It maybe that the none holiday plus included features which now appear frivolous, like new card designs or materials etc.
It may also be that the holiday one was much better value and they worry the none holiday version looks poor as a stand-alone offering, and many hear and in press would be happy to express this damaging Monzo’s image
Haha. I remember the last time they showed a notification (not push) in the app and it caused a flood of people to go to chat asking why they received it, what does it mean, what’s the update and so on… All things that were answerable if they’d have just clicked it and read the message
The Monzo tone of voice posts. Gender pay gap discussions and actively trying to hire a more demographically representative staff base. Openly and loudly supporting LGBTQ+ staff and customers.