All these posts are very interesting but perhaps OT for this thread.
Really? Why? I imagine that legacy banks prefer to release less frequent updates (monthly is common) as they focus more on quality control rather than releasing a MVP or beta product.
If they wanted to, I’m sure the big banks could release more often. In fact, I’d prefer it if Monzo did more testing/development of the app in Test flight etc and made changes before releasing to everyone.
And that’s why they offer children’s accounts and large interest free student overdrafts.
Is the technology worth that much? It might have been at one stage but banks have since invested millions in their own apps/systems and they could buy a smaller firm if they just wanted some technology (or licence it).
As for the current customer base, it seems many use the account minimally or just overseas and might go elsewhere - bearing in mind that many have accounts elsewhere as well
If Monzo are not careful, the main value they will have to others will just be the brand name unless it’s a new entrant. There will also be competition concerns of some of the big players wanted to take over Monzo intact.
I see that this thread has become another to rain down on :mondo:, but I hope no one is doubting the excellent quality of their technology and its potential worth to others
There is a big difference between good (or okay) technology as a small firm and something that scales up and is reliable
Which is mostly still gloss and wrapper around the outside. Most of these banks only hold transactions from previous months as PDFs
Yes. It has been built completely from the ground up*, with none of the cruft that is found in legacy systems. That’s tremendously valuable. It also has a 3D Secure implementation that has been praised by Mastercard as being the best out there (tried to find source where a Monzo staffer said this, but as you can imagine the search terms are perhaps a bit too common).
While legacy banks have invested in their own systems, these are hampered by having a tremendous amount of cruft and interoperability issues, and why there would be value to be had in buying Monzo.
As for buying a smaller firm, if the event under discussion comes to pass, Monzo will be the smaller firm in this equation.
*I will acknowledge that in some cases, like the ‘must have a personal account to open a joint account’ case, it has ended up being a disadvantage. But such cases are rare, and no doubt easily fixed if the will to do so is there.
This article seems like propaganda with the aim to make the general public think that Monzo is selfishly hoarding money in financially stressful times. To wit:
[Monzo] hoovers up deposits and sits, Smaug-like, on the idle cash.
[this has] got Alphaville thinking about the ethics of how it conducts its business.
They are doing this with disinformation; specifically the myth that banks lend out deposits. They do not. You can read this directly from the Bank of England itself. And, yet, the FT article states:
At its core, banking is about channelling idle savings, in the form of deposits, to those who need capital
No FT journalist could be uninformed of this fact. It’s worrying that the FT is willing to stoop to this level. Is it for the benefit of one of the author’s friends or associates? Who’s to know.
Actually the only one of those that affects me is probably going to be the increasing limits one
flawed system for increasing limits
I don’t think I have the confidence in monzo just from posts on the forum etc that when it comes to purchasing my new home within the next year I’ll use my other account for all things house related. Not sure how much monzo makes on things like that but im sure theyd make some sort of money from a high transfer of a deposit to a third party and the higher balance for few days etc. maybe im wrong.
If i think like that maybe others do too, would certainly add up.
cheque imaging
more reliable cash deposits via the post office
lack of bic number/sep
All the others arent necessarily problems for me but are known blockers for others getting money into their account and be “full monzo”.
Prioritisation of things like this should be higher in my eyes than other items like dark mode which alot of people would like (myself included) but lets face it offer no monetary value to customers or monzo and are purely a vanity thing.
I agree that they would help but I don’t need most of those things either. Perhaps this is why they’ve not jumped at the chance to provide them?
Remember though that “full Monzo” (which I believe is a term they’ve now dropped), was only to have your salary and at least one direct debit setup. None of those things prevent you from doing this.
Maybe thats where the problem lays… is the goal not still “make money work for everyone” or has that changed also?
Agreed, intention should be to encourage people to use Monzo as their primary account, all those things i listed would surely do that by removing the reliance on secondary accounts to do basic banking things.
Other than going all in on the premium accounts what is the aim and goals on how to increase the profitability im not too sure or at least the messaging isnt too clear.
Getting sidetracked though a bit from the thread so ill leave it there, hopefully in the coming weeks we all get a better idea of monzo’s intentions going forward.
True but when it comes to building a successful business it’s always better to please more people than you already are.
The problem with this is that section is mainly focused around those who for the most part have already chosen monzo.
Banking features that are available elsewhere but not in monzo are the types of features that will attract those who bank elsewhere whether current monzo customers want them or not.
Perhaps but I think it’s the features that the forum users here don’t ‘need’ are arguably the features that are needed most in order to attract those customers that aren’t already here.
This is no longer a requirement. The other director in my company only has access to the business account, and another business account they’ve since CASS’d over. No personal account at all.
Do you imply that it should free, or just more reliable? I don’t think offering free deposits via a paid service, will help profitability.
What they’ve done technically, is beyond what most modern banks can achieve. Fintechs have often been approached by (and worked with) legacy banks on improving their systems because they can’t move as quickly because they’re carrying so much dead weight with them. There’s a number of talks on YouTube that reference this.
We see this come up on the forum a lot: “I don’t pay for X”. Nothing in life is free. Period. You pay for TV in one of two ways:
(a) via your TV license (for the BBC);
(b) through your time, because of advertisers.
Even if you’re watching on catch-up, you’ll be subjected to adverts. It’s literally costing you in time. Our society doesn’t seem to acknowledge time as a transactional commodity. I’m particularly irked by this, as being heavily involved in the software world, I get very frustrated by clients using the phrase “but we don’t pay for this bit of functionality with X company”, whilst ignoring the data they’re giving away for free, or their time invested in watching/viewing ads.
This has been mentioned in other threads, but when moving house, the large deposits are never time-critical on your part - you’re given a window (often weeks) in which to move the deposit to your solicitor, who orchestrates the final transfer (and charges you for doing so). The very fact Monzo is willing to allow a higher faster payment through, rather than forcing you to pay £30 for CHAPS, should be commended. My legacy bank for my first house purchase, got really funny when I suggested I’d make the transfers in smaller amounts across the course of a week to avoid paying the £30.
Look at this from a different perspective - if Monzo’s goal is to increase their deposits, yet they make it seamlessly easy to increase your limits for outbound faster payments… Which bank is going to become an (even bigger) target for fraud? The contact via chat/phone is positive friction in my eyes.
I think the precedence has been set an it has to be free.
I personally never understood charging for this… if they have to put a lower limit of say £30 to push out the edge cases to make it on average be worth more than it costs then do so.
Adding money to the account then opens it up to generating revenue from the other aspects of the person using their account with that money.
Again I see your point but I have to say that when I get around to buying my first home (the main and probably only time i would need raised limits) I would like zero friction to an already stressful situation and another chance for me to mess something up when im in an unfamiliar situation.
I don’t want to derail the thread over a series of posts, but just humor me. What do you watch to avoid (a) paying a TV license (“tax”), (b) avoiding adverts?
Fair point, but you’re still “paying”. The original point was “TV is free”, which it fundamentally isn’t, even if you don’t directly put your hand in your pocket for some cash.
Whilst legacy banks have always done it this way, and Starling have followed suit, a year (or two? or three?) back there was noise around the Post Office increasing their fees for banks, as many of the individual offices are loss-making and slowly being closed. If we were to lose the post office in as many locations as we have them now, at least the PayPoint system is so widespread. Not to mention the fact I (personally) avoid our local post office as the queue is in excess of an hour most days (even before COVID).
And on the topic of COVID, are cash payments going to become less frequent, to the point that maintaining that relationship with the post office, stops becoming a viable option? Businesses already have to pay for their banking services when paying in cash, in most scenarios, so there’s already precedent for charging for payments inbound.
I’d double check your legacy banks faster payment limits, as whilst the faster payment scheme supports up to a 6 figure value, banks regularly do not let you access this limit as standard, with most (if not all) forcing you down the CHAPS route as an alternative.
Nationwide - 10K
Barclays - 10K (personal, it’s higher if you’re on a premium tier)
RBS - 20K
Lloyds BG - 25K
There is a whole topic on this below, and most of this is arguing over the interpretation of what does or doesn’t require a licence. tl;dr it’s not really clear.
There’s a saying that “If you’re not paying for using a service, then you’re the product.” This is clearly true of Facebook, which is essentially a tool for advertisers to better target their ads at users, who get the service without paying anything. It’s also true of terrestrial TV and a whole range of other services.
It’s clearly not true of banking, where the rules around the type of ad targeting are stringent - though obviously the larger banks use their knowledge of customers to cross-sell them other products. Many also have services that allow them to target discounted offers from retailers in exchange for a cut. For example, Lloyds has Everyday Offers. And traditionally, banks over the majority of their costs through lending. Traditionally, costs are covered by overdraft charges levied on those who can least afford it.
This is not true of Monzo - which means that if their service is free to customers, who’s paying? Clearly they make some money from card usage, but until now, the bulk of the cost has been borne by investors - mostly venture capital firms.
I don’t think it’s unfair to question the sustainability of their current business model, but I do think they’re still attractive as a disruptor and innovator - and if they couldn’t find a better business model, they’d still be an attractive acquisition. Even paying full price for them would be just pocket money to a company like Apple.
