📰 Which is the biggest challenger bank in the UK? - Verdict

(Alex Sherwood) #1

So this report puts Atom at no. 1, based on their 900m+ of deposits & Monzo at no. 1 based on their 500k+ users. But Atom only has 17k+ customers & Monzo hasn’t said how much they’ve taken in deposits. So I’d be interested to hear how much Monzo’s users have deposited now..


Atom doesn’t offer Current Account so they have a very different business model. I don’t think we can compare saving accounts to current accounts.
Their definition of biggest is very narrow IMO, doesn’t take account of the number of user and usage although Monzo is the only one on the list giving information like;

It’s also interesting to see the figures Monzo is dealing with. Over £125m was spent online, whilst Monzo customers sent over £43m to their friends


They wouldn’t have deposited anything, because Monzo don’t have a deposit product, unless I’ve missed a massive update?

(Alex Sherwood) #4

I’m assuming that deposits includes any in-credit balances that Monzo current accounts have, I don’t think the money has to be in a savings account?

Monzo can loan a portion of those in-credit balances, to earn Net Interest Margin which is why the figure matters.

(Alex Sherwood) #5

I didn’t know that :eyes: but although it’s not 100% like for like, I’d still be interested to see the difference in between the figures.

I’ve tried to check but this is all I get from their signup page :roll_eyes:


(Micky) #7

Seems like a pointless comparison to me.


That’s comparing two different things; a proposition built for deposits, and one that’s more accidental, or a consequence of getting a salary paid in.

Although the figures are impressive (in terms of money spent and sent using Monzo), it does still beg the question of how is Monzo make a decent, sustainable return?

Atom aren’t 100% clear about their CA, although it’s ‘some point in the future’.

(Alex Sherwood) #9

Yes I understand that :slight_smile:

Lending deposits will get them closer to break even. While referral fees from the marketplace will earn them the real money.


You hope so, as it’s exciting, but it’s a really new concept, and we (UK public) aren’t the quickest at picking new things up. The negative media coverage of Open Banking et.al isn’t going to help either.

(Alex Sherwood) #11

Yes I should have acknowledged the fact that I don’t know that for sure :slight_smile:

There’s plenty of reasons to be concerned & plenty of reasons to be optimistic, I guess we’ll have to wait & see :crossed_fingers:


I actually meant to put ‘You’d’ not, you!

Sounds a bit accusational!


(Simon B) #13

Question is, can you still consider Atom a challenger bank when BBVA own 30% and consider them one of their acquisitions?


(Alex Sherwood) #14

I never have :slight_smile: & the same goes for Metro bank although they’re a little more similar so it’s an apples to oranges comparison. Which is what makes it interesting to me, we’re comparing Monzo to a new legacy bank :smile:

If Monzo had more deposits at this point, that would be a positive. If not, then as others have mentioned in this thread, we know why. It just gives a bit of a sense of how the different approaches compare when it comes to this particular measure.


All depends on your definition of a ‘challenger’! Arguably, if they are to be bought by BBVA, they’re not a bad bank to be owned by; even 11FS have recognised them as such.

The way I see it is that Atom have gone for a less sexy, more traditional route, creating a stable base (albeit with a terrible app) to then build upon. Whereas the whole CA/Opening Banking/marketplace place thing is interesting etc, but is it going to develop at the scale to support Monzo, Starling and the rest?

Banking will change, but not in the short-term, so you need to be around to take advantage!


What do you mean; because it’s using traditional products etc??

(Alex Sherwood) #17

Mainly because it has the same business model as the legacy banks but also because they’re on an old school technology stack.


But those models make money, that’s kind of my point. Make money, get stable, then have the platform to trial new tech.

Really?? Shocking if they are? What are they using?

(Alex Sherwood) #19

This isn’t a 100% reliable source but it’s the best I can find -

It has created a hefty technology set-up in its run up to the launch: FIS’s Profile core banking system; FIS/Sungard’s Ambit Quantum and Ambit Focus for treasury and risk management; Iress’ Mortgage Sales & Origination (MSO) suite for mortgage business, front-to-back office; Wolters Kluwer’s OneSumX for regulatory reporting; Intelligent Environments (IE) for front office capabilities; CSC’s ConfidentID system for security; Phoebus Software for secured business lending and account servicing for residential lending; and WDS Virtual Agent for customer queries supplied by WDS (a subsidiary of Xerox).

Sure but if you’re not changing the business model then you’re still exploiting users with things like punitive charges & not fully taking advantage of the opportunities of things like digital & Open Banking.

I doubt they will, I get the impression that they just saw an opportunity to make more money by eliminating branches but for their business to work, they don’t need a completely modern stack.

Sorry 'bout the edits, I do that a lot :wink:


That seems a lot for two simple products. Imagine it plays to them wanting to use SaaS instead of building though.