While I have nothing but admiration for what Monzo has achieved so far (even surpassing my expectations) I think Monzo needs to become more bank-ish and profitable ASAP to prove it is a viable business.
Being a Hub for financial services is a good idea, But I think it will take a while for people to trust API’s (open banking) and therefore it will hamper Monzos progress to profitability unless they have other revenue streams.
Monzo is a force for good in a banking industry that is rotten to its core - I therefore want to see Monzo succeed and become a trail blazer.
To complete their mission they need to become profitable ASAP to prove good ethics can be profitable.
I would therefore like to see Monzo offer credit cards, Loans and Mortgages in a responsible Monzo way - ASAP.
Then in 3-5 years time when the Financial hub idea is fully trusted they can be both an ethical bank filling the gap Co-Op left while also helping the British population find the best financial products for them.
Totally agree about credit cards. They don’t have to be all about debt - I use mine for air miles, section 75, and the fact that all my purchases are moved to payday, but I always pay it off in full. If Monzo offered one, I literally wouldn’t need any other spending cards in my wallet, and it would offer a great revenue stream from all the interchange fees. Mortgages would clearly need a bigger balance sheet, but I don’t think credit cards would?
It’s there to take them through to profitability but if the profits don’t come the investment cash tap is turned off and we are left with no profits and no cash to “burn through” which means - no Monzo
You should check out the open office this month as it is all about profitability:
Also check out all the videos on the YouTube channel, there is one on there about how previously a new customer would lose Monzo money but new customer aren’t losing much or are making money. They are becoming profitable with the existing products and loans are also on the cards I believe.