There is some discussion about the process over on the cheque imaging thread.
I don’t want to drag the thread off topic too much, but basically it would be even more complicated to implement cheque imaging as a result of relying on a third party.
Monzo could either choose to join ICS (the Image Clearing System) themselves and bring the process fully in-house, which is what Starling have chosen to do, or they could continue using NatWest but this would need work to integrate their in-app scanning with NatWest’s backend clearing services which wouldn’t be easy.
True, but I was thinking more along the lines of (potentially) sparking more discussion about cheque imaging which really ought to be in the proper place of the relevant thread so it can easily be found by others.
I wonder how much of that £26m launching and aborting UK expansion was spent on buying google searches for 'Monzo" and how much waa spent on tube ads? Maybe half/half
Seriously though, this is more evidence that neo banks are struggling everywhere… not good for anyone who wants a thriving fintech scene.
I don’t see how they expect to turn a profit this year on the back of an 8 figure loss. They are hiring hundreds of staff as well and their growth velocity has slowed despite being available in dozens of countries - does not look likely.
There is a lot of bluster and sales puff when promoting fintechs, but saying you will be profitable this year just sounds like a bare faced lie. I’d be delighted if they prove this wrong but i would not fancy the odds.
Not sure I agree with this. Starling seems to be doing alright. Their product is somewhat limited from a consumer point of view but I see value in their B2B offering. I do think there needs to be a fundamental shift which hasn’t occurred in Europe yet. If you look at Asian fintechs they’ve built out independent payment networks which bring massive improvements to both sides of the payment.
Alipay and Tencent’s payments platforms in China are a great example, they started with the payments infrastructure and then expanded to traditional banking, financing etc. Earlier in the journey but across SEA countries Grab is doing the same thing and adoption is huge because of the benefits.
2 Likes
andrew_fishy
(Biggest horse fanatic in Leeds)
2081
I don’t think there’s much to see here. Higher losses make sense when you’re expanding on a global scale and penetrating more markets, so I wouldn’t say they’re struggling. Being backed by Tencent gives them decent money to throw at this stuff too.
Compared to Monzo, their losses remain high, despite lots of obvious cutbacks and scalebacks across the company, and not really investing into much of anything to expand or grow, which is why I think theirs greater concern here. Monzo don’t even have the resources to expand on a global scale. Their losses would be all the more terrifying if they did, and I suspect it’s why they don’t or haven’t.
There are rumours N26 are looking to acquire a bank to break back into the U.K., and aid them further in the US. They want to be a global bank. They’re going to have to spend a lot of money to get there, which means a lot of losses. I think losses are fine and to be expected when you’re making significant progress in your plan, spending extra money as a result, which justifies them.
I think it always was interesting, they just left the interesting bits out with the U.K. version. In Europe they have their own savings, credit and investment products too, though the latter may have been discontinued now. But we never saw any of that.
I hope they come back at some point too, only this time with the complete suite of financial products they have in Germany.
I really doubt that they would even consider this.
If they come back, I would imagine it will probably be as a stand-alone bank again (like last time). This allows them to import their own product from day 1 and not have to deal with the fallout of buying an existing bank, which might not give them very good press or a decent customer base.
Unless, of course, one of those banks is being sold off cheap.
I think we covered this in the Tandem thread, but what they’d be doing is basically be buying the banking licence. Quicker than applying from scratch and possibly cheaper too (if it’s a distress sale).
Someone like TSB might be a bit too big (unless it was, say a joint deal with Virgin who took the branches and customers and N26 got the licence).
What I meant was that you could buy Harrods Bank (as Tandem did) and fly under the radar in shutting it down, as it had relatively few customers and wasn’t a mainstream concern.
This wouldn’t be so easy to do with the likes of TSB, and there would be a heavy reputational hit to your new venture from the inevitable bad press and “save our TSB” campaigns that would result. It even happened with the Co-op Bank when they were bailed out by hedge funds, plenty of customers weren’t happy and took their grievances to the press.
Also, you have to do something with the existing customers. Closing their accounts just results in more bad press, but trying to migrate them often results in a nightmare administrative headache. Just look at how much Jaja are struggling to move over customers of Bank of Ireland UK’s credit cards.
And if they were to return, hopefully a better marketing campaign could increase uptake too.
Like you, I had high hopes for N26, but unfortunately as you say, their UK product was just too lacking compared with the incumbent offerings.
