Predictions for Monzo (and fintech) in 2022

[peteroxted (Peter Jones)]

My wife opened a current account specifically so that we could have a joint account. If that’s really not going to happen it’s time to look at the others

[duncang (Duncan)]

Joint accounts exist and work. They are just lacking some nagging features that you might not even notice. What do you need your joint account to do?

[peteroxted (Peter Jones)]

Thanks for your message
We wanted a joint account for general household bills. So far Monzo will not allow us to open a joint account and cannot, or will not, tell us why so we are quite frustrated and will, reluctantly, have to go elsewhere

Kind regards,
Peter Jones

[duncang (Duncan)]

I guess that’s a rather different and more personal issue then.

[Peter_G]

Okay, time to see how I did! I’m gonna score myself from 0-3, 0 being none of the prediction is right, 3 being it’s spot on in every respect.

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Flex

@Peter_G

• Flex will roll out fully. Not everyone will be eligible, but everyone with a Monzo account will have the ability to apply.

That’s a - Flex did roll out fully.

@Peter_G

• There will be some marginal tinkering, but despite this some glaring oversights will remain.

That’s a big fat . At the beginning of the clear I was sceptical about Monzo’s ability to iterate at speed and to focus on ongoing product development. I’m very happy to have been proven wrong - Flex has gone from strength to strength, development hasn’t stopped and we’re about to get physical cards (probably). So a big on the record apology to @TheoGibson (that’s becoming a habit) and Monzo in general.

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Paid Accounts

@Peter_G

• Monzo will launch payments from pots for paid users. This will mean that direct debits and standing orders can be paid directly from a pot without doing the main account shuffle. I’m 50/50 as to whether they discontinue the current offering. Whatever they do there will be minor community controversy.

Nope, didn’t happen.

@Peter_G

• Trends will bring in other time periods (weeks, years etc). It will still not really provide any actionable comparators or effectively segregate mandatory and discretionary spend.

That’s a . We got year-view in Trends (which still remains my favourite feature of the year). No weeks and no comparators between periods (except by swiping the graph). But Targets goes a long way to segregate mandatory and discretionary spend, even if I think it’s not quite all it could be yet…

@Peter_G

• Budgeting will move to Trends. It won’t be an improvement over what’s in Summary.

I’m going for a controversial on the basis that a) it’s not (yet) replaced what’s in Summary and b) it’s both an enhancement over Summary (splitting out mandatory and discretionary spend in particular) but also a retrograde step (in that you can’t budget per category or account for occasional out-of-budget spend).

@Peter_G

• We will (finally) be able to add notes, split bills, use shared tabs and search connected accounts. We’ll also be able to Flex transactions in connected accounts. Yay!

How wrong can a man get?!

@Peter_G

• I said this for 2021, but I’m giving it another go (because it’s ridiculously obvious): a web interface for (at least) paid customers.

How wrong can a man get?!

Quoting for truth.

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Customer support…

@Peter_G

• …will still be poor. …

So I’m torn. I’ve had some excellent customer service this year. As well as some poor ones. I’m gonna go for a perhaps harsh (to Monzo)

@Peter_G

• … but Monzo still still score highly on satisfaction surveys and nothing will be done.

Another - Monzo is still up there in the league tables, regularly swapping places with Starling for first and second place. I don’t know what’s happening behind the scenes, but it does feel like support is a bit better, though…

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Core Banking

@Peter_G

• Curve ball! We’ll finally get cheque imaging. After dark mode and cheques the Community won’t know what to moan about.

@Peter_G

• A master feed will appear, as if by magic. A little like the Trends account selector it’ll let you see transactions for multiple pots / connected accounts in one place.

I’m giving this a - only because we have the beginnings of one in the Overview new homescreen in labs!

@Peter_G

• We’ll be able to make payments directly between pots. (This will be a missed opportunity to sort out the payments tab).

Narrator: they were not able to make payments directly between pots.

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New products

@Peter_G

• Monzo will integrate with a stock broker (50/50 on this being Freetrade) to offer passive funds and crypto (I’ll roll my eyes at the latter).

I’m awarding myself a generous because we know that something is happening via the app tear downs. Quite what, though, wasn’t revealed in 2022.

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International Expansion

@Peter_G

• the US will be limping on.

Goodness me, I was grumpy / pessimistic. For me, the US team was one of the breaths of fresh air over the last year. One they’ve got the base feature set in for the US, and the unit economics are right, I think/hope that the US could be a Very Big Monzo success story.

@Peter_G

• nowhere else will get the gift of Monzo, despite me randomly screaming “Europe starting with Ireland” at infrequent intervals.

(If you excuse me not shouting that all that frequently).

@Peter_G

• towards the end of the year though, assuming that Monzo is profitable, new markets will be discussed again.

- no sign of other international expansion yet.

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Business health

@Peter_G

• Monzo will still have made an overall loss in the next annual report, but it will be lower.

@Peter_G

• Monzo will reach 6m users

Yep, that happened. Then they stole the customer counter from us.

@Peter_G

• the FCA probe will either result in a small fine and slap on the wrist - or become an existential issue with Monzo acquired at a knock down price.

All TBC… No score

@Peter_G

• curve ball! Jonas, the last founder standing, will announce that he’s leaving Monzo.

@jonas is, to my knowledge, still with us . A happy

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Community and Media

@Peter_G

• This forum will continue to wither, with the same small number of voices dominating.

I’m not sure that ‘wither’ is the right word, but I do think that there are a small number of voices dominating, with potential new users being put off…

@Peter_G

• The CEO will continue his media shyness. He won’t post on here. Nor will anyone else from the C Suite (except perhaps Jonas if he does leave).

A sad

@Peter_G

• There won’t be any UK Community events. (An outside chance of doing a one off something, virtually or in person, if the pandemic eases up by the summer).

Another sad

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Elsewhere in banking and fintech

@Peter_G

• Dozens and Project Imagine will just about survive the year. Although perhaps in a very different form.

So Project Imagine is still with us. But Dozens was shuttered. A

@Peter_G

• Starling won’t release a credit card. They’ll focus on mortgage lending and on resembling a high street bank without branches. They’ll hype their pending floatation, but there will be bumps in the road due to defaults on the covid loans they issued.

All spot on, except for hyping flotation.

@Peter_G

• Revolut will get a UK banking licence, but might have to make significant concessions (including ring fencing its UK operations with an independent CEO and Board) to keep it. It’ll throw a load of money at attracting new customers, but the effect will be marginal.

Big

@Peter_G

• Tandem won’t survive the year in its current form.

Big

@Peter_G

• Atom Bank and Coconut will be takeover targets.

- not to my knowledge

@Peter_G

• Who could predict what’s happen with Curve? They’ll see out the year but be rapidly scrabbling for revenue.

- I think that’s a fair summary.

@Peter_G

• Metro Bank will get its mojo back and end the year with a share price over £1.40.

So not quite £1.40, but a bit of a rally at the end of the year to end at £1.21. I’ll give that a

@Peter_G

• Chase will launch direct debits and standing orders. It’ll extend its cashback offer so it covers Christmas 2022. It won’t make as big a dent in the market as it has hoped, but will continue to throw money at it.

I’m gonna give that a cautious . Obviously there’s something subjective in there about JPM’s own expectations, but I think it’s fair to say that it’s not (yet) challenged the high street (or Monzo, or Starling) in terms of public consciousness or user numbers.

@Peter_G

• Nutmeg will be folded into the main Chase app.

Nope.

@Peter_G

• Freetrade will launch in Europe. It will launch crypto trading (and I’ll roll my eyes again). Its momentum will slip as we move into a higher interest rate environment. If it integrates with Monzo it’ll take both firms to a new high (and set the stage for an eventual merger).

So Freetrade did launch in Sweden. It did not launch crypto (thank goodness!) and its momentum did slip as interest rates increased (so much so it’s effectively put itself up for sale).

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Out of a potential total of 99 votes, I got… 44.

Goodness

[N26throwaway (Sir Tom MacMonier)]

@Peter_G

regularly swapping places with Starling for first and second place.

Not sure which polls you’re pulling from here, but they’ve dropped a bit in MSE ranking lower than Starling, Chase and First Direct in the most recent, despite previously vying for top 2 with Starling.

https://www.moneysavingexpert.com/poll/2022/bank-account-service-/

[Peter_G]

I meant the regulatory poll:

Independent service quality survey results

[N26throwaway (Sir Tom MacMonier)]

@Peter_G

I’m gonna give that a cautious

I’d have gone with a 2. Purely depends how we’re defining a big dent.

This place offers a rather skewed take with Chase that trends much more negatively and pessimistically than what I feel it’s like in reality.

Anecdotal metrics aside for now, if we look back to the MSE poll (bearing in mind in each pool you can only rate one bank, and you’re encouraged to rate the one that’s your main account) they score a similar share of the votes to Monzo and Starling.

On the App Store, they’re not far off the total number of ratings that Monzo has, which suggests a solid number have at least signed up for it.

I wonder if Chase have released any figures yet? Because I feel like it’s broken past a million at least.

Anecdotally, where I am it’s gaining traction very quickly. I still meet people who have never heard of Monzo, and I know that’s a metric folks like to measure in their social circles too compared to how many of them know Monzo, which again is likely to be skewed heavily in favour of Monzo given the community we’re all members of. Chase is starting to feel about as well known and as widely used as Monzo is up here.

Personally, I’ve moved on from Chase after all the issues, and Monzo’s balance tab, actually spent a good amount of time with RBS as my main bank when you throw in the Monzo crashing issue effectly rendering my whole duo with those two banks kaput for a few months. But I do find myself impressed with how well Chase seem to be doing. Not that I really should given how much they’re spending on it!

[Ralph76 (Ralph)]

@N26throwaway

But I do find myself impressed with how well Chase seem to be doing. Not that I really should given how much they’re spending on it!

Have they listed anywhere how much they’re spending?

[N26throwaway (Sir Tom MacMonier)]

I think there was an article about somewhere in the Chase thread. I’ll try to find it for you and update this message when I do.

Edit:

JPMorgan doubles down on UK retail bank Chase

$450 million in losses in 2022.

[Ralph76 (Ralph)]

£10 billion across 1m customers is pretty mighty. But those are some mighty losses also.

[Peter_G]

@Ralph76

£10 billion across 1m customers is pretty mighty

So my cynical (but accurate?) take is that that £10bn figure was almost exclusively down to the market leading 1.5% savings APR they had at launch.

I’d be stunned if they have anything like that figure for assets under management now - I suspect the folk that went to Chase for the rates early doors would also be those most likely to up sticks and leave.

Like the cashback, I suspect that the savings were an initial loss leader to a) try and make folk stick with the current account, and b) generate an eye-catching, early “success” metric, given some of the critique of the international expansion.

[Ralph76 (Ralph)]

@Peter_G

So my cynical (but accurate?) take

I’d say that sounds like a perfectly sensible explanation!

Will be interesting to see how the next 2-3 years goes for them and whether they can get a foothold.

[Peter_G]

I think if they’d bought Starling (as was rumoured) then they’d have cleaned up. I know others disagree, but I think that the combination of the Starling technology and JPM’s financial muscle would have been unstoppable.

(I’ve said that a few times before, but I think it’s probably better in the longer term that that didn’t happen. I think strong, independent, listed Starling and Monzo will be net beneficial additions to the banking landscape).

[Sachaz (Sacha Zarb)]

Feels like Chase is turning into a very good savings account, and less convincing current account.

To @Peter_G point, still think one of Monzo and Starling will be brought, still convinced that Stripe will come back again for Monzo once they IPO

[Ralph76 (Ralph)]

@Peter_G

I think if they’d bought Starling (as was rumoured) then they’d have cleaned up. I know others disagree, but I think that the combination of the Starling technology and JPM’s financial muscle would have been unstoppable.

Completely agree with you. If their objective is to build a typical retail bank but on your phone, buying Starling would have sped up the development of that journey by at least 3 years. Starling are almost there really. It could still happen if they feel like momentum at chase is slowing at all. But with Goldman looking to buy that extra chunk of Starling shares maybe they’re the ones to make it happen.

@Peter_G

(I’ve said that a few times before, but I think it’s probably better in the longer term that that didn’t happen. I think strong, independent, listed Starling and Monzo will be net beneficial additions to the banking landscape).

It’s definitely good for Monzo! I still think Monzo has the edge in what they’re building. Any bank trying to build a typical bank on a smart phone should do well, but Monzo are building something genuinely useful/helpful. I’m really interested to see where they can get the product to in the US and when it gets to feature parity with all other banks. Feels like it’s almost there and so wonder whether they will look to push marketing more and how much traction they get (and how quickly).

[N26throwaway (Sir Tom MacMonier)]

@Ralph76

I’m really interested to see where they can get the product to in the US

Same! Especially as I’ve learned how they’ve grown that team recently. They have a good bunch of ex-Simple folk and folks who know quite well what Simple was loved for and what made it unique. With simple out of the way, a carefully built feature set could both fill that niche and rival Chime. Not to mention they have the guy behind DASBudget on their team too. I’m somewhat optimistic now, whereas a year ago I saw them following in N26’s footsteps. They still haven’t made as much headway as N26 and they already pulled out, so they’re certainly dedicated to making it work.

For me personally, it’s exciting because some of the things they need to build to be a full service bank there would also fill in niche service gaps here if they port it back over, which should be easier once the tech is built. Check support being the big one. We’re not nearly as reliant on them as the US, but they’d be a nicety to fill that one small use case void.

The other thing I’m hoping, and I think there’s evidence that it’s already the case, is that the US folks get a fair sway on the way Trends works. I still believe Simple was the best at this in the world, and the US team has the talent to build something just as good, if not better (see again: DASBudget), and again, certain tweaks to cater for each country’s user base would again fill the niche gaps of the other. There’s a lot of tandem to be had from Monzo’s US project.

[Peter_G]

I totally agree with almost all of this! I certainly think the US is giving Monzo the ability to go back and fix some of the fundamentals that they never sorted out in the UK. And I’m very impressed with the team over there - last year I thought they might give up the US expansion. Now I think that the US is theirs to lose. And, like you say, the experience of that team is super helpful for the global feature set.

@N26throwaway

Check support being the big one. We’re not nearly as reliant on them as the US, but they’d be a nicety to fill that one small use case void.

This is the one thing I don’t think I agree with. I might be under estimating, but I think the tech component of this is relatively low value. Sure, screens for cheque scanning could be reused, but the real value is in the connection with the (presumably very different) payment schemes. In the UK that means becoming a member of the Image Clearing Scheme, putting up (I think) a substantial bond to effectively buy into that company, having the right technology and connections (I don’t think it’s as simple as a standard API call) etc etc.

I’m not saying that there’s nothing reusable. But I think when you boil it down very little will be.

[j06 (Jamie)]

When are your predictions for Jan 1st 2024 coming out?

[Peter_G]

@Sachaz

To @Peter_G point, still think one of Monzo and Starling will be brought, still convinced that Stripe will come back again for Monzo once they IPO

I think that’s probably a fair call. While I’d like to see both of them as staples for years to come, I suspect that they won’t remain standalone for too long. Stripe would be the perfect partner for Monzo (or failing that Google or Apple, although I can’t see either of them wanting to be actual banks).

For Starling, I think that an overseas financial giant like Goldman (or maybe even a domestic player like Lloyds) might make them an offer they can’t refuse.