Monzo Staff Weekly Q&A - Valerio Magliulo (Product Manager - Revenue Team)

[WillP79]

@simonb I’m surprised to see “venture capital investment” as part of your description of the business model. Do you consider investment as revenue?

[simonb]

No, that was the first bit of the explanation whereby I explained that the investment sustains the company as we move towards profitability

[Christophorus]

Do you try and ensure that revenue is generated in an ethical fashion?
For instance, if a company offers good money for referrals but you disagree with their stance on something ie environment, or sexual politics, would you turn that down straight or try and find a way to work with them that didn’t cross a boundary.

I might need to edit that for clarity. Bear with me.

[Theodore]

While reading about US neobanks Chime & Simple, they both make revenue from their partners willing to share interest margin and merchant interchange service fees with them . Are these 2 revenue streams that you consider(ed) for Monzo?

Also, following on from this, should the Transferwise partnership on international payments go ahead, will Monzo make some revenue from the mid-market rate charged on such transactions?

Thanks in advance!

[nathanthomson8]

Interested to hear you describe how you see the interest on pots working.

[Jackcrwhitney]

Since you started working at monzo in 2016. What’s the hardest aspect to deal with due to the companies growth?

[Rat_au_van]

What happened in India with the almost kidnapping?

[simonb]

Good questions all, keep em coming!

[joshpriceonline]

There’s customers like myself who won’t make you money from traditional methods. For example, I don’t have an overdraft and don’t intend on taking up anymore. I buy stuff only if I can.

How does Monzo plan to make money from customers like me? I assume there’s a good amount of them.

[Rat_au_van]

Starling have recently announced they are providing the MasterCard send service. Do Monzo have any plans to make their payment systems available to third parties as another revenue stream?

[evangelskies]

If you were briefly a famous pop star in Hong Kong, can we have your autograph? could you sing in Cantonese?

Jokes aside, what made you get into fintech and what inspired that career switch?

[Chapuys]

Will you need to be credit checked every time you apply for a transaction to use Spread the Cost? (I’m not saying customers would or should use it often, but if you used it 4 times per year that is still 4 hard checks per year on top of any other you might have had).

[valerio]

Hello hello! Thanks for posting all these questions. Here’s what I think about them but do please reach out if you’d like to chat more about it.

when offering a short term loan how do you plan to educate customers on when to use a loan and when to use an overdraft?

That is definitely our goal. I imagine that in a couple of months’ time we will have a couple of lending feature which would all suit different aspects and moments of your financial life. We can use that as a base to help users understand what works best for them in their particular situation.

Do you see different interest rates on pots perhaps by locking pots for a pre-set time duration?

I think that’s totally in the plans, depending on the feedback we’ll receive. We are likely to launch at first with just one simple feature that will allow you to receive interest on your pots and then think about more nuanced versions of it, such locking the pot or even using it to help you stay out of your overdraft (a lot of people requested this!).

Do you see potential to offset pot interest against overdraft charges (Obviously easier if interest was levied instead of a daily fee)?

oops - I jumped the gun here. See above

How about plans for foreign currency pots? Such as setting up a lot in €, $, ¥ etc?

We currently don’t have plans for that. I can see the appeal and there being a market for it but we haven’t really thought about it yet. I think we still have a long way to go to make pots in £ really strong, before we can think of new currencies!

How do you decide which companies to include in the marketplace including the upcoming savings pots? Is it solely based on the best deal for the customer or are the ethics and transparency of the company also a factor?

There are a number of factors that we are considering when selecting the most appropriate partner:

1. Are they technically capable to support this type of integration? Can they move as fast we can?
2. How do their rates compare to the market? We don’t aim to have the top rates in the market (as they frequently change and we’d struggle to keep up with them) but we certainly want to have good deals for our users.
3. How do they use the deposits they collect? There will be thorough due diligence to ensure we are aligned on this.
4. Do they share our values, specifically around transparency? We want you to know how much money, if anything, Monzo is gaining from the partnership and our prospective partner needs to be more than okay with that!

There’s a lot more that we’ll look into before entering an agreement but these are the key points that might interest you!

Cats?

I’m gonna be super unpopular but I mostly despise cats. I’m a dog person. I had not one, but two diseases transmitted by some stray cats I took home as a kid (toxoplasmosis and tinea) and I’m terrified ever since. However, I’m growing ever fondly of the beautiful Cooper that lives with my friend. Picture here:

Pineapple on pizza?

Sadly this video is in Italian but I’m sure you’ll get the gist of it… https://www.youtube.com/watch?v=4FOU_aD00Sk
(that’s also where I’m from, by the way)
Also this Twitter account really explains how I feel about this and other food crimes: https://twitter.com/ItalianComments

Do you try and ensure that revenue is generated in an ethical fashion?
For instance, if a company offers good money for referrals but you disagree with their stance on something ie environment, or sexual politics, would you turn that down straight or try and find a way to work with them that didn’t cross a boundary.

We haven’t come across a situation like that yet but we’d definitely want that we are fully aligned with our partners on the values we share. We wouldn’t partner with a company that is unethical because of their products or the way they carry their business. Sadly, we can’t guarantee that a company we might work with would later turn out to have done something that crosses the line but we are committed to do our best due diligence (and ongoing review) to ensure we are partnering with the right companies for our users.

While reading about US neobanks Chime & Simple, they both make revenue from their partners willing to share interest margin and merchant interchange service fees with them . Are these 2 revenue streams that you consider(ed) for Monzo?

Sadly, interchange fees in the US are much much higher than in the US which allows them to return some additional value to customers. In the UK end EU, interchange fees for debit cards are capped at c.0.20% which leaves us very little space to offer things like cashback or loyalty points.

Also, following on from this, should the Transferwise partnership on international payments go ahead, will Monzo make some revenue from the mid-market rate charged on such transactions?

I believe that companies that partner with Transferwise would receive some form of commission based on customer acquisition and a share of the fees charged to customers for the transfers. I am not knowledgeable enough about the topic, I’m afraid

Interested to hear you describe how you see the interest on pots working.

• Create a pot
• Tap, tap, tap and you get interest

That’s how simple it should be - no signup, no account creation, no further identity checks. The only inputs we would need from you are how much you’d like to put into the pot and whether you agree to the terms.
This is obviously aspirational so bear with us while we work to achieve it!

Since you started working at monzo in 2016. What’s the hardest aspect to deal with due to the companies growth?

Well, we’ve gone from 40 employees to 300+ so there’s quite a few things that make it challenging to compare. The obvious additional complexities come in the form of increased governance, risk assessments and just generally procedures that are necessary for a company of our size.

The hardest aspect for me personally is probably how each employee takes ownership of a problem beyond their domain. In the early days, we had a company-wide daily standup at 10, called the 10@10. We all stood up and mentioned a few problems we were working on, urgent things etc. That was a great way for anyone in the company to jump in and say “Hey, I’ll help you out with that as it feels like a big priority”. Now that we have proper teams and structures in places, ownership is passively assigned and it gets more difficult to be proactive in helping each other out.

However, I’ve seen recently a big change in direction with our #burnification effort (https://twitter.com/makingmonzo) and a strong sense of ownership across the entire business to build the best current account that will make everybody go #fullMonzo. I’m overall optimistic

What happened in India with the almost kidnapping?

It was actually terrifying. I lived in Jaipur for a while as a volunteer. I was coming back from a weekend away to see the Taj Mahal and I was in a rickshaw late a night with a girlfriend. A SUV with black windows approached the rickshaw at the traffic light and two big men came out of the car and started pulling me and my friend out of the rickshaw. Our driver was not resisting at all so we had no help. I can’t remember the exact words I said to him, but I think I was the most convincing I have ever been and he finally pressed the accelerator and we ran away. I’ve never feared more for my life than in that moment.

There’s customers like myself who won’t make you money from traditional methods. For example, I don’t have an overdraft and don’t intend on taking up anymore. I buy stuff only if I can.

How does Monzo plan to make money from customers like me? I assume there’s a good amount of them.

There’s a lot of features that we have in the pipeline for the coming months that wouldn’t require you to take on debt. The marketplace is an example of this - you can purchase some products ranging from stock and shares ISAs to phone contracts and we would earn a commission for that.

Ultimately, while it would be great we don’t have to sell all of our customers revenue-generating features. We also generate small revenues also by placing your deposits at the Bank of England and by receive a small interchange fee from MasterCard on every transaction you make.

Starling have recently announced they are providing the MasterCard send service. Do Monzo have any plans to make their payment systems available to third parties as another revenue stream?

We don’t have plans for that at the moment. We are mostly focussed on customer-facing value creation as we think there’s still a lot we can do to build the best current account in the world. Anything like that would be a big distraction in my opinion.

If you were briefly a famous pop star in Hong Kong, can we have your autograph? could you sing in Cantonese?

I can’t sing in Canto but I can still say 唔該靚女! I studied at 香港中文大學

Jokes aside, what made you get into fintech and what inspired that career switch?

My background is in finance (investment banking) + operations and growth at other tech companies. It was only a matter of time before I finally combined the two and switched to fintech. I also wasn’t generally interested in fintech as an industry but rather incredibly excited by the mission that Monzo set itself. I was always of the opinion that finance should be a force for good and an enabler for people to achieve their full potential. The type of finance I had seen before was mostly creating money out of money for people that have already too much money.
I also remember being blown away by the people I interviewed with (Tom, Jonas, Paul, Leah, Maria and Luba) who were all incredibly smart, thoughtful, empathetic and just nice.

Will you need to be credit checked every time you apply for a transaction to use Spread the Cost? (I’m not saying customers would or should use it often, but if you used it 4 times per year that is still 4 hard checks per year on top of any other you might have had).

Sadly yes, because it’s a regulated fixed sum credit product, we have to leave a hard search every time that happens. We are thinking about building another type of feature that would work very similarly to Spread The Cost but would only require one hard check in the first instance…watch this space!

---

And that’s a wrap. Thanks all. I’m always around if you have any questions around how we plan on making revenues, what my favourite kpop song is and just generally random stuff.

[anon44204028]

Thanks for your replies. I can understand your attitude to cats as I was attacked by dogs twice when I was young and bitten by one again last Friday when it escaped from someone’s house.

[Dunsford]

Thanks for quoting the question that you are replying to, makes it so much easier to read!

[evangelskies]

You’re into kpop? Favourite group and songs at the moment?

[robboadam]

HI @valerio! I’m actually looking to be a Product Manager in tech. My motivation is a love of consumer technology and wanting to be in the centre of new features and products being created.

What would you say your motivation is (what gets you out of bed in the morning, apart from a great team), and what is your most/least favourite part of being a Product Manager?

[valerio]

You’re into kpop? Favourite group and songs at the moment?

My all time favourite is Nobody by the Wonder Girls

What would you say your motivation is (what gets you out of bed in the morning, apart from a great team), and what is your most/least favourite part of being a Product Manager?

@robboadam great to hear you’re interested in PM! I get out of bed excited to be solving sometimes very complex problems with delightful features that our users love…I’m that kind of kid who played Lego all the time, for example.

The most exciting part of being a PM is how much you can achieve by supporting a bunch of smart and creative people like designers and engineers to achieve our goals. At Monzo we talk a lot about PMs being servant leaders, rather than the usual CEO of the Product and that’s a fascinating position to be in.

While there’s nothing I dislike, the most challenging part is to build just enough context on all the different aspects that touch product development (design, tech, compliance, finance, customer operations) so that you can be the most efficient in your role!

Best of luck with your career and get in touch if you ever want to bounce more ideas

[robboadam]

At Monzo we talk a lot about PMs being servant leaders, rather than the usual CEO of the Product and that’s a fascinating position to be in.

That’s a great analogy - have heard it at GDS as well, so good to hear it seems to be an idea that’s spreading!

Best of luck with your career and get in touch if you ever want to bounce more ideas

Thanks very much - hopefully will bump into each other in the future!

[simonb]

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