This is quite interesting read about Monzo’s financial situation from The Telegraph. I have just come across this article in a recent post on Starling forum.
Some bits from the article look slightly worrying:
"…Pre-tax losses hit £33.1m, up from £7.9m the previous year.
Monzo’s highest paid director, thought to be Mr Blomfield, earned £305,000 during the year in wages and share-based payments, up from £60,000 the previous year.
Mr Blomfield said Monzo planned to achieve profitability “very soon” through services such as overdrafts and further cost cuts."
“The bank said it would look to cut costs further by providing more automated help services alongside support staff.”
Are there reasons to be concerned? Increasing losses are accompanied by executive pay rise and possible compromises on customer service? Am I reading this incorrectly?
The loss isn’t surprising considering the prepaid didn’t end until April and the huge jump in customer numbers.
If processes were in place that people didn’t need to speak to customer services then it wouldn’t be a reduction in standards and would make it easier for customers. But it depends how that’s implimented
This one breaks the figures down a bit more. The £15 cost per customer includes £10 customer support costs. The blog post breaking all this down will be interesting.
You’re already seeing this in the form of the help screen (that we’re continuing to improve) and projects such as self-serve transaction disputes. The support tools are also improving greatly from even when I last seriously used them a few months ago, making it much easier to investigate queries.
The thing is that all these headlines about Monzo finances sound rather alarming. If you don’t have financial expertise to understand the growth process of a newly established bank, you might be actually worried about banking with them…
The journalists all have a point, these losses are unsustainable if they carry on forever. But my theory is part of the problem here is that the British press aren’t as used to analysing tech companies, high growth x high burn rate strategies as the US press, for example. I expect they’ll be happy when Monzo is breaking even
Obviously it’s not great for less-informed consumers to be reading these headlines but I doubt it’ll do much long term damage.
