Monzo Staff Weekly Q&A - Annual Report Edition!

I’d like to avoid having to read those :wink: & I want to make sure that I don’t overlook any sources of income for example, that I may have forgotten about / am unaware of.


CEO Report Together, this has helped us lower the cost per account to around £15 in June.

About £10 of this cost goes towards providing fast, friendly support: the team who speak to our customers and solve their problems every day, in-app, over the phone and on social media."

As the number of customers increase does the £10 customer service cost remain fixed or reduce as volume thresholds are achieved for example the current cost base can service 10X the current customer base with some modification to support tools so Monzo forecast the cost to service reducing to £1 per customer.

Are customers more or less expensive to service dependant upon the amount of time they have been a Monzo customer?

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Do you feel Monzo could become even more transparent?

Another question (sorry): could you explain what the £15 figure to run an account is made up of? It is all the costs that Monzo has as a company divided by the number of users, or is it more sophisticated? (If so, what’s included in it, and what other costs do you incur that aren’t included in the number?)

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I really hope this is the right team to ask this question :smiley:

I think it’s great that you’ve managed to get the cost down to £15 per user and I look forward to that going down even further but surely this will happen if nothing changed?

As monzo get more and more customers the developer cost per user goes down not because anything has changed just because the % has been diluted?

Also do non development members of staff/non co-ops staff contribute to this £15/user figure? People who aren’t co-op’s and or developers so essentially the bank could run without them? Not trying to discount what they do but I’m talking more the community management side of them? and how do you justify this spend when arguably there would be little difference for potentially hundreds of thousands of pounds in savings?

I’m not sure there’s anything that I’d like to publish in the Annual Report that we don’t :thinking: It’s a pretty standard set of data that companies have to publish. I think the most interesting part is definitely the intro from Tom.

However, there’s definitely more we can publish from internally as part of being as transparent as possible — a few things I’ve been thinking about recently are: our “How to Monzo” guide that new employees get, our company-wide quarterly goals and thinking about how we take the success of The Big List and roll that out to all of our product roadmap going forward. I’d love to hear if there’s more you think we should be sharing too


The increase in costs were essentially driven by the massive spurt of customer growth we had over the summer of 2017. This included loads of customers that love to travel and overseas transactions are more expensive for us. We also really value delighting our customers and invested heavily in building a wonderful customer support team that could keep up with helping our customers on a live basis. This was all on the prepaid card program, and since we’ve now upgraded most of our customers to the current account, our per customer costs have dropped significantly to just our £10 per active customer


Yes :slight_smile: We explicitly made much more effort to share this with the media this year.

However, I think much of the coverage was pretty lazy journalism. Writing headlines about how Monzo’s losses have massively increased might get clicks, but totally misses the point. We’ve raised significant amounts of investment for exactly this purpose — we’re not keeping it under the mattress after all, and many of the articles missed the most interesting long-term points — specifically, our huge successes in reducing the cost of each new customer, which is likely to be the biggest enabler of our long-term sucess.

So some of the blame there definitely comes down to us — we clearly didn’t convey to many journalists what was important well enough and paint the picture well enough. But I also wish the media would move away from reprinting press releases with a snappy title and towards deep, well investigated, well thought through examples.


The honest answer is that very few people (relatively) use and so it’s not a significant cost for us. If it grew massive, we’d definitely need to take a closer look — it might turn out to be well worth the costs because of the new people it brings in. Or it might now. But it’s just not an issue at the moment and so there are no plans to curb the costs :slight_smile:


Very good question! In order to really offer our vision of Monzo as a marketplace, we need certain permissions from the regulators that let us show you things like investments or insurance — which we don’t yet have. We’re in the process of getting these, so as soon as that happens, we can hopefully kickstart work on the marketplace again. We’ll also have way more people to help then — up to now, we’ve been limited and so only been able to focus on a few things (like reducing costs and driving revenue through overdraft).

The long term plan is still 100% to make money through the marketplace, where Monzo’s interests are aligned with those of customers. We fundamentally believe it’s the fairest and best way we can build Monzo into a business that’s around for years to come.


Almost all companies have to go through a period of loss when they’re starting up, it’s part of investing in your product and building yourself up for a longer term future. We are just a 3 year old company really and it’d be great for people to also focus on where we’re going - we’ve reduced the per customer loss from £65 on prepaids to about £10 on the current account and we couldn’t have done that without investing our platform and our people


I think an average legacy bank makes around £100 profit per customer on current account fees and overdrafts, we don’t expect to make quite that much because we’re not planning to charge any sneaky fees :wink:
Overdrafts are definitely an area where we can offer a more affordable alternative to legacy banks but I don’t think it’s a going to be a major revenue stream in the long term. I’m looking forward to the longer term goals of building out a marketplace and offering other features that can help customers more holistically manage their money.


Our “COps engineering” team tend to be very reactive and work on improvements on a short term basis based on things they believe can make a difference and quickly, so there isn’t a huge roadmap there. However, it’s basically an extension of what we’ve already done — making it even easier for you to find your own answers (through more and better answers and machine learning enabled search), making it even easier for you to do things yourself (like disputing a transaction) and making it even easier for our customer support team to reply to you quickly and accurately (through better tools on our end).

We’re very clear that we don’t want to degrade service to reduce costs. Instead, we’re focused on improving efficiency!

As to why we can run an account cheaply, it comes down to:

  • We built Monzo from the ground up on our own systems. We managed to reduce costs in the last year from around £65 to £15 and a huge proportion of those costs savings came through this. We don’t need to pay third parties to run or maintain our systems and we know how to fix things when they go wrong!
  • Efficient customer support (see my answer above)
  • No branches
  • V small team relative to big banks. We have 300ish employees. Metro Bank have about 10x as many employees and just over a million customers (off the top of my head)

The IT infrastructure is partially driven by our excellent engineers optimising their use of the platform such as our AWS servers, and also partially just by scaling through our customer growth

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Card top ups are the big one. Please stop, if you can :pray: I’ve been getting my salary paid in for months now and it’s so much better.

Contacting customer support is the other big one — obviously contact them if you need them, but please just check we haven’t already answered your question in the Help tab :slight_smile:


Ha. I remember the very first Alpha cards — we only printed 3k of them because that’s all we thought we’d need. Our business plan had some numbers in that we definitely cruised past ages ago — low hundreds of thousands optimistically is probably what we were thinking!


Yes — especially for new customers. We’re seeing new customers come into Monzo with fewer preconceptions and so being much more willing to pay their salaries in and go Full Monzo quicker. I think the numbers there are around 20% and trending upwards healthily. Older, prepaid users are much slower — we’re seeing them trend upwards well too, but it’s just a fair bit behind — people still like using their cards as disposable spending cards, rather than full bank accounts. That’s totally fine and our challenge is to make Monzo good enough for them to switch :slight_smile: Hence The Big List and other upcoming projects


One of the key things we’re working on this quarter is investing time into really understanding how people use credit and what they’re looking for. We obviously have overdrafts now, which we’ve worked to make super transparent — but only a specific segment of people want to use overdrafts (generally people with middling credit scores). People with very high credit scores tend not to be interested in overdrafts and much more interested in credit cards — and so we’re exploring how we can help them with what they’re trying to do (smoothing out large purchases with 0% interest for a while, for example). Credit cards aren’t on the cards ( :wink: ) at the moment, but it’s a really interesting problem we’d love to solve one day.

No news on European accounts at the moment I’m afraid!


Definitely not a dumb question and as a regulated bank that’s something we ask ourselves all the time!

So the £15 loss per customer covers what we call ‘variable’ costs, being the costs that directly relate to producing a current account for customers - this is things like our delightful COps (customer operations) team, costs of running mastercard, etc.

We also have ‘fixed’ costs which are outside the £15 for other company expenses that are less directly related to customer accounts. This covers things like our office rent, insurance, other staff like engineers, finance etc. After adding these things in, our net cash burn rate is running a little over £3m a month.

The other component we need to consider is that as a bank, the regulator requires us to hold back a minimum amount of capital (essentially cash for us at the moment) to cover potential negative scenarios. This is a requirement for all banks. So the kind of good news is that if we burnt through our cash without raising more capital (or turning a profit), we’d sooner hit on the minimum capital levels we’ve set with the regulator before running out of actual cash. This actually would not be good news at all so it is something we monitor quite regularly :slight_smile:
At our current burn rate, we could get to about mid-2019 if no more capital was raised.


Nope not at all! I don’t think the focus has shifted at all really at a high level — we explicitly wanted to focus on “Make Monzo make sense as a main account :moneybag:” then and partnerships stuff was on a longer timeframe of 8-12 months. That’s still 100% the plan and I answered earlier in more detail about partnerships: tl;dr still planned and as soon as we have the right permissions, we’ll spend significantly more time there!