Predictions for Monzo (and fintech) in 2023

Undeterred by my spectacular performance in predicting 2021 and 2022, I’m back. Third time lucky, right?!

As previously, this is what I think could happen, not what I think should (or even what I want!). So what is in store? :crystal_ball:


:one: Monzo Global :globe_with_meridians:

  • The new Overview home screen will be developed iteratively through the course of the year. The UK’s Investments product will be dependent on the new home screen so there will be some trade-offs in getting Investments launched for April: either it will be bolted on through a new tab if Overview isn’t ready, or Overview will be launched but have rough edges.

  • By the end of the year, we won’t know how we survived without the new home screen. Overview will be configurable for users and changes will be made on the basis of user research, data and customer feedback. The team won’t stop at the home screen, though, and will move through the app updating look and feel and rebuilding screens so they work seamlessly with the new design. This process will continue into 2024.

  • Salary sorter will work with connected accounts. It’ll see that you’ve been paid into an external account and trigger automatic movement of money into Monzo and into Pots. In the UK, it will do with through the new Variable Recurring Payments functionality through open banking; in the US, it’ll work via Plaid.

  • There will be a focus on increased automation throughout the app. Get Paid Early will be launched as automatic in the US, with the UK following later in the year. Salary sorter will become automatic in both countries

  • Summary will be retired.

  • Led by the US team, there will be support for different budgeting periods (primarily weekly and fortnightly). I have 50:50 odds as to whether that will also cover (still significant) UK outliers like 4-weekly pay.

  • Linked to this, there will also better support for pay days, meaning that Monzo will be able to support better pay periods with users able to specify pay days like “third Thursday in the month”

  • And finally on budget and pay periods, Monzo will also integrate get paid early with the Trends periods. This means that your pay/budget period will reset automatically whenever your pay is received - even if that’s through get paid early.

  • Connected accounts will add notes and social features (including splitting the bill and adding transactions to tabs).

  • Manual accounts will be introduced so that users can keep track of accounts they can’t add via Plaid/open banking.

  • The social features will be overhauled. They’ll work pretty much the same but will get a facelift, be a bit more integrated and generally work better with each other.

  • There will be more work on Trends - the Targets tab will be iterated and you’ll be able to budget by category. There will be at least two extra tabs in Trends (although the bottom Trends tab may disappear as part of the new home-screen).


:two: Monzo USA :monzo_usa:

  • The US will go from strength-to-strength. They will focus on localising UK features properly, introducing US-specific functionality, but also drive automation and rethinking of legacy UK functionality.

  • The US team won’t push take-up until both the unit economics and US-specific features are where they want them. Monzo will then start to market (probably by trying to leverage network effects as in the UK) after which take-up will accelerate. Monzo will have six-figure customer numbers in the US by close of the year.

  • As part of the take-up drive, Monzo USA will start offering (small $10?) referrals bonuses.

  • Get Paid Early (which will be automatic) and payments from pots will be launched. 50:50 chance that the US team will come up with a different approach to card payments from pots than by using virtual cards.

  • Joint accounts will launch and see significant take-up. Unencumbered by not having to deal with Plus/Premium differences in the UK (and legacy tech debt), US joint accounts will be quite the hit. Monzo will go further and start developing budgeting and money-management functions for couples. There will be a new card design when out of beta that separates JAs from the hot coral personal accounts.

  • There will be one part of Monzo USA that works quite differently to the UK. The UK Community will prefer the US version and lobby to bring it to the UK.


:three: Monzo UK :uk:

  • Flex physical card launches. They’ll be a new Flex feed in the app and it will appear more and more like a credit card with a BNPL product on top. You’ll be able to pick a default instalment plan (which you can set to work like a typical credit card) but you’ll still have the ability to change to a BNPL product on a transaction-by-transaction basis…

  • You’ll be able to Flex purchases from selected connected accounts.

  • Joint Accounts will be relaunched. Either Plus/Premium is offered as for JAs or the paid offering changes so that JAs can have feature parity with things like custom categories. This will be a fundamental reengineering of the product, which we’ll first see in US joint accounts, but will come to the UK during the year. The redesigned US JA debit card will make it to the UK. It will be unembossed.

  • Monzo will rethink Paid accounts. Premium will likely remain as it is, but Plus will take on a different value proposition, with some current features absorbed into the free tier (perhaps only for those who pay their salary into Monzo and use a certain number of direct debits).

  • Virtual cards will become free for everyone. All users will have a (small) number of free virtual cards with a Monzo account.

  • To compensate, Monzo will introduce single use / burner virtual cards and increase the number of virtual cards available for paid accounts.

  • Monzo will launch additional physical cards for pots. They’ll work the same as virtual cards. Plus/Premium customers will be able to order a small number for free. Non paying customers (and paid customers who’ve maxed their allowance) will be able to order for a one-off charge.

  • Investments launch. 70% chance of it being a big success. They will nail the UI/UX. uptake will ultimately depend on the fees. There may be a discount for paid customers. They will offer stocks and shares ISAs and general investment accounts. Monzo will aim for an April launch for the new ISA tax year.

  • Trends will take on wealth planning, forward-looking, functionality that is complementary to the investments product.

  • Virgin Money and Chase will be added to connected accounts. At least in Labs.

  • Monzo will make a (limited number) of connected accounts available on the free tier.

  • Monzo will signal a move into mortgages. This won’t launch in 2023 but we’ll see signs of a new product being launched (like we have with investments this year). This could either be a brokerage service or directly provided Monzo mortgages. If the latter, towards the end of the year, we’ll start to see Monzo savings accounts with attractive rates.


:four: Monzo Corporate:business_suit_levitating:

  • Monzo becomes profitable on an ongoing basis. :tada:

  • Monzo will look to expand internationally again. My guess is to either to Australia or to the EU. If it’s the EU, they’ll start in Ireland, build out an English version of a euro currency app, start with English language support. Monzo will prefer to have an EU banking licence but they might piggy back on an existing bank for pace. Ireland won’t be the destination though. Once the euro account proof of concept works, they will target a big country for localisation and move in aggressively. Probably France. If it’s Australia, they’ll take the same approach as with the US and build out slowly. None of that’ll happen this year, though - we might just get an announcement, job ads or a line in the annual report.

  • Monzo will make its first acquisition. Either a struggling UK fintech as an acquihire (25%), to jump ahead on a product line (e.g. vertical integration with a trading platform or by buying a mortgage book / provider - 50%), a European bank / fintech (15%), a US bank for its licence (5%), or something else (5%).

  • Monzo will be fined by the FCA following the closure of its investigation. It will make the news, but Monzo will have worked closely with the FCA to rectify any failings and the bank will be able to turn the page.


:five: UK Fintech

  • Deathwatch for Curve and Project Imagine this year. :cry:

  • Freetrade will be sold. Very early investors will get a return, but the vast majority of crowd-funders won’t, with some of the later rounds losing quite a bit. This will cause bad press and a kick-back against crowd-funding.

  • Starling still won’t have launched a personal / consumer credit card. :credit_card:. Bad press over the covid loans will reoccur during the year - neither the government nor Starling will come out of it looking good. Financially, though, Starling will remain secure. 35% chance of a trade-sale (which would be against Anne Boden’s wishes).

  • Chase will be under increasing pressure to show success in the UK market, but won’t have a breakthrough year.

  • Revolut will have some difficult decisions to make about trade-offs required to gain a UK banking licence. 40% chance they change leadership / management structure and secure a licence, 20% chance they abandon it, 40% chance it’s not resolved this year. Revolut will say that they are profitable, but there will be newspaper articles that look sceptically at the definition of profitable.


Phew, that was quite the list!

Whereas last year I was pessimistic on Monzo’s ability to execute, this year I’m bullish. They have their mojo back - they just need to keep it now. I’m all in on these!

These thoughts are all mine, but have been informed by the Monzo USA Roadmap (it’s excellent), @davidwalton and his tear-down machine, and, well, educated speculation.

Anyway, enough of my mad ideas - what have I got right? What have I got wrong? What have I missed? What are your predictions?!

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Great predictions there.

My additional guesstimate is that the recent new developments like Trends & Overview may have paved the way for cleaner hooks into displaying sections of the app in a browser-interface for UK users (as is mentioned in the US roadmap), which will open up scalable displays on tablets, foldables, laptops, etc.

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I’m just impressed you can think of that many things to predict.

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I really hope a lot of that ends up being right! :eyes:

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I predict Peter will be offered a job within Monzo

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Will it be a) the caretaker, and b) will it have share options?

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Literally the one thing that would make me ditch everything for Monzo probably

I imagine a web/iPad version of trends would be immense.

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They really should. It grates me that if you are in the US you get this for free but in the UK you have to pay for this.

On that I’d go as far to say that plus will go completely. Now, before I get shot down let me put my stall out.

  • Premium offers a comparable offering compared to other banks
  • From a paid account comparison plus offers little compared to other banks
  • From an aggregator account plus is value add compared to others.

So I see two things. Plus either going fully or being revamped while current features become free completely/if users put in a certain amount per month.

On that I’ll add another. Monzo releases trends as an independant app for budgeting with a paid tier or licences the technology to other partners.

I’ve tried a lot of different aggregators recently and I would consider using trends alone if I could.

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I can see that happening. I think Monzo’s strategy this year will be to build network effects into the app - i.e. each feature makes the app more than the sum of its parts and makes it all work well together. The logic being that, if you use the Monzo app, you’re more likely to take out an investment, purchase Premium or use the current account as your main account. Each of which generates revenue. I think making Monzo your banking app, even if you bank with e.g. First Direct, is a strategic win. And if some of the other stuff I wonder about (like salary sorter for connected accounts) comes off, then I think they’re in with a real shout of ‘owning’ the customer whilst competitors provide the old, expensive, creaky infrastructure - but with Monzo getting the mindshare and first dibs on new products. If you also imagine Flex for connected accounts (or even overdrafts for connected accounts) you can start to see what the possibilities are. That has to start with free connected accounts, though. I’d say they’d go for two initially - one current and one credit card.

I don’t think they’ll do this. But if the play I speculate above comes off, I can see them offering the Monzo app without a Monzo current account downstream. Maybe. Just maybe.

This, though, would be a strategic misplay, imo. By all means get into banking as a service, but Trends is a strategic advantage and Monzo has global aspirations. So it wouldn’t make sense (to me at least) to erode that either in the UK or overseas.

That reminds me: I didn’t mention Emma, Lumio and the like in the predictions: I think they’re gonna have a tough year.

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I don’t think they will. Mainly because away from Monzo they’re servicing a need. I have three legacy banks and only one of those has anything like decent in house budgeting.

Since I don’t use that, I’ve found Lumio/Emma most useful to see what I’ve spent and where.

Nothing comes close to trends but since I don’t use Monzo currently I don’t feel the need to have the app just for that section.

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Do you pay for Emma/Lumio? I’m just wondering if paying for Plus would be something you’d consider instead? (Not trying to sell it to you, just wondering whether it would/could be a substitute).

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I actually did consider this! But I don’t pay for Emma and Lumio even as a pro is only £29 a year which is less than plus so…

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I hope so, Plus really doesn’t feel like it’s worth £5 /month, I pay it for the virtual cards and connected accounts but I’d prefer to either pay less (maybe £2/£3) or get more for it (e.g; some kind of purchase protection like Revolut offers).

I was using Premium until last week and that’s much better value for money (was only £2.51 more than AppleCare+ with loss + theft), but others have suggested the insurance isn’t great so I ended up going down to Plus and buying AppleCare+ for my new phone.

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I reckon anyone who’s built a product around Open Banking is going to feel pain, and get M&A’ed, big consolidation in that area coming this year

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Agreed, this has to be a safe bet. I’m not quite as optimistic that I’m going to love the changes. I’m again reminded of complexification. I loved monzo for the simplicity of the current account feed, and I feel some of that is at risk of being lost, or at least hidden behind other layers.

I think this is inevitable but whether or not it happens in the next 12 months depends a bit on how competitors’ apps develop.

I think we will see the credit card launch but it’ll be interesting to see how the pitch it. I see people on this forum asking for a fintech credit card - will starling be that? And if so, will it be enough to make it a success?

I suspect you’re right about there being more fallout from the covid loans.

No. Nope. Never. Too clunky. Too likely to create confusion when the data is wrong. Too 1990s spreadsheet vibes.

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Interesting, I can see a merger and consolidation but as an outsider I’m interested why such a change over the next year :eyes:

That makes me very sad.

Most of these were based on some evidence or extrapolation. This one wasn’t - I might be guilty of wanting it so much I’m wishing it into existence :frowning:

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I don’t see a problem with it. Easy to implement and people can choose whether to use it or not. Monzo could even add the option to set a reminder every x days/weeks/months to check and confirm/update the amount in each manual account.

I have a few accounts (NS&I, some fixed term accounts) which I’d like to include. The figures change rarely, and they’re not available on open banking.

The mortgage linking option isn’t updated in real time, but I think is a brilliant idea and well implemented (and if it’d been available 2 years ago I’d have used it) and I think manual accounts would be a great addition to a financial overview.

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Manual accounts that you would trigger to reduce by X amount each week/month, or link to a transaction such as your mortgage payment.

It’s not real time accurate data from source, but a replica of such created by you to monitor as you wish.

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Monzo can’t even get their own accounts to tally correctly, probably should focus on that before they start to worry about adding others.

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