I completely agree with your suggestions regarding Monzo providing a better rejection & feedback experience for users who don’t have the necessary credit score to receive credit.
But when it comes to this point
I disagree - overdrafts will be Monzo’s first product & the product that enables them to break even so it’s a pretty big deal for the business & they should develop this product to make it as good as possible.
TL;DR I believe Monzo could do a better job at both assessing creditworthiness & informing users about their score / dealing with issues, than the incumbents.
They’ve already proved that by applying machine learning (& rules) to their fraud prediction model, they can beat the industry average so why shouldn’t they be able to do the same when it comes to assessing creditworthiness? That would enable them to lend to more users & earn more revenue as a result.
Also, we’ve all heard the horror stories about the difficulties users have when trying to get their credit report amended, after taking a hit for something happening that shouldn’t have actually impacted their credit score. I’d argue that Experian & Equifax are essentially a duopoly and don’t care about individual users enough to bother with resolving those sorts of issues.
On top of that, I’m unable to access my credit score through Experian’s site because of their archaic, inflexible verification process and I’m sure I’m not the only one…
Lastly, I could be wrong but I have a feeling that it would be difficult for Monzo to identify exactly what caused the user’s score to be too low, based on Experian’s data. As I don’t think Experian shares the exact formula which determines how scores are calculated. Monzo could be much more transparent (as they are in every other area of their business) & would know exactly what the negative factors were.