Monzo Staff Weekly Q&A - Tom Blomfield (CEO)

That’s great to hear but what if you include the cost of onboarding users e.g. KYC checks, the cards etc?

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Hindsight is a wonderful thing!

Knowing now what amazing user-growth we had in 2017, I would have paid more attention to account costs and generating revenue earlier.

It costs the average bank about £120-150 to acquire a new customer, so we were laser-focussed on growing organically. And I think it’s fair to say we nailed it; we sign up 60,000 new accounts a month at the moment with zero cost-of-acquisition.

But as a result, we had a huge number prepaid customers costing us about £65 per year in 2017. We’ve now managed to bring that cost-per-user down to around £20 on the current account, and we’re now working hard on revenue - things like lending and third-party partnerships. But we could have started this journey earlier and probably used up less cash.

As an aside, Stripe topups are currently our biggest cost (for migrated users), so it would be amazing if you could all fund your account with a bank transfer. Or, better yet, move your salary over!

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I talked a bit about our costs and revenue here already.

Another thing is team growth. We’ve gone from something like 100 people last April to around 330 today. Lots of stuff that was working at 100 people breaks when you grow to 300.

So we’ve had to think a lot about organisational design, internal communication, managers, progression, training.

Jonas likes to say that his job is to build the machine that builds the Monzo product. That’s all about team.

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My first salary payment will be 25th of this month and I’m looking forward to :monzo: being my main account for the next several years!

Keep up the good work!

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I don’t know where to start. There are so many.

Coming into this as a non-banker, I had some assumptions about data consistency and integrity that were incorrect. I believed that since we’re moving money around, everything had to be strictly correct at all times; “strong consistency” in database language. Three years in, it feels a bit like the entire financial system is duct–taped together. It’s “eventually consistent” - so many things can go wrong with all the interlinking payment schemes that the industry has developed a huge range coping mechanisms. End-of-day reconciliation is a good example.

Another is the amount of paper (and fax machines) that are still used in traditional banks. Human beings have to re-enter information between systems at an incredible volume.

The third thing is the siloed thinking about financial products. I see this almost daily. I spoke to someone yesterday who was involved with commercial lending and had a massive product team. But he explained, apologetically, that his remit was a 5-year unsecured consumer term loan. Someone else’s team did overdrafts and purchase-finance, and all the other products. As a consequence, most of the thinking in banks revolves around the financial product, not the customer.

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The ability to take the money in a pot and move it to a savings bank to earn interest, all without leaving the Monzo app. And to still see that money within the Monzo app as a “savings pot”. I opened a Shawbrook account through our marketplace, and it was ok, but I had to re-enter a lot of information that Monzo already. And now that money feels invisible. I’ve lost track of it.

Also, automated business-expenses submission. I have photos of receipts and tags, so this should be simple to automate. I wrote a (ranty) blog post about this a few years ago.

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How emotional money is.

Behavioural psychology has more to say about how people really think about their money than classical economics.

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Amos Tversky, John Maynard Keynes and Karl Marx. I’d like to see the argument.

I love Indian food, so maybe Dishoom.

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Knowing everyone’s name. I try hard to meet everyone, but we’re 300+ people now and I’m forgetful.

We crossed Dunbar’s Number about a year ago.

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The problem of managing all of your money in one place. Making it to the end of the month without getting hit with unauthorised overdraft fees. Slowly saving up for a special purchase. Managing your bills in a flatshare or a house. Not getting ripped off on your car insurance when it auto-renews.

The thousand niggling problems people encounter when trying to do all of the tedious administration to stay on top of their finances, and survive in today’s world.

Real, human problems.

Instead, the banks are trying to solve their problems; how can we sell more mortgages or credit cards?

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I think most of the new challenger banks are totally different to Monzo. OakNorth, Paragon, Shawbrook, Aldemore, Masthaven, Charter Court, and more. There are about 15 of them, and they’re basically savings-and-loans companies. They offer consumers fixed-rate savings accounts and compete primarily on price. Their customers tend to be 55-65 years old, and they interact with the account approximately once per year.

Our average customer is 31 and interacts with Monzo about 650 times a year. We’re about day-to-day money management. Visibility and control of your finances.

There are a handful of other banks and non-banks (N26, Starling, Revolut) across Europe, and I think they’re all doing a pretty good job of offering a service that works for consumers. It’s nuts to think we’re competing with each other - we’re taking marketshare off Barclays, Lloyds, RBS, Santander and the like.

(Users of this forum may be an exception; a lot of people here like to try out accounts at all of the fintechs. Including me. But I’m not sure we’re representative of the mainstream population :wink: )

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We see each other every month or two and it’s always good to catch up. I think she’s built a really talented team, and Starling have built an app that’s certainly more fully-featured than Monzo (for now :wink: ).

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These are awesome answers @tom

Which other bank could I see, live, the CEO giving his thoughts on banking in the C21st. Keep up the good work!

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That’s awesome :smiley:

Current Account Switch Service will available to everyone very, very soon, which will make the process of switching over your salary and Direct Debits really smooth.

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Monzo feels natural now. “Mondo” seems very out-of-date and reminds me of this (very) old logo…

image

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I get my salary paid into my Monzo account every month. I closed by Natwest account about 4 or 5 months ago, so I’m pretty reliant on this whole thing working out.

#fullmonzo :rocket:

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Make something people want

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Two of them already did.

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Which ones?

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Which categories do you think will be coming up next on the Marketplace beta? I’m holding out for some insurance options (gadget related preferably, as a Londoner with no car and no hope to own a property any time soon…)

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