Rethinking Banking - Marketplaces and App-Only Banks - London FinTech Podcast 📻

[alexs (Alex Sherwood)]

Since the original topic’s long enough, I thought I’d add a few highlights of my own separately, which are noteworthy & / or feed into the conversations that are happening here in the community.

• Partnerships with banks & building on top of bank’s APIs to create products, access to payment schemes are all possible hypothetically but these things can’t be done at the moment

• Getting a banking license vs offering a prepaid solution: The benefits of being a bank are: direct access to payment schemes, the bank business model - taking deposits & lending that money, to earn net interest margin, FSCS deposit protection, control over compliance ‘burden’

  • You don’t have to work with a card sponsor or issuing bank who have their own ideas about risk & compliance and tend to “gold plate” regulation.
  • Simple.com use Bancorp & N26 use Wirecard and “their biggest problem is their sponsor bank”

• On messaging: if you say to journalists or investors or customers “we’ve got an innovative new prepaid card / eMoney wallet” they’re a little bit skeptical [about whether Monzo really is doing anything very different] but if you say “we think banks are broken, we’re starting a bank” people take notice

• Monzo wants to be seen as a trusted agent or partner of the customer, to help them run their financial lives

• Monzo is still planning to help users report their business expenses

• Tom hates “those horrible pie charts in your traditional banking app” too

• The average age of a Monzo user is 31 / 32 (so demand isn’t mainly coming from students), they’re outside London & they’re not mostly techy (unlike the Alpha users)

• Monzo wants to provide details about providers of the financial products in their marketplace like “here’s what other Monzo users have chosen” & star ratings but also “here’s how long it took them to sign up” as “the administrative burden & the overhead of just filling in forms is more painful for a lot of people than the pure price”

• When Tom mentioned

  @alexs

  investor products

  he was referring to P2P lending, starting an ISA or topping up your pension.

• “Head of Partnerships” = “Head of Marketplace”

• Tom is personally very interested in the recent announcement from the US regulators -

Financial Technology Start-Ups to Get a License to Bank (in the USA) - The New York Times

This article doesn’t actually mention Monzo but I’m filing it as Monzo related anyway, as this has big implications if Monzo wants to expand into the US & Tom retweeted the article. [image] Highlights Many technology firms have been pushing for some sort of new regulatory system that would allow them to cut through the patchwork of state and federal laws that govern financial activities and make it hard to expand nationally. “What excites me most about the changes occurring in financia…

“300m, English speaking, affluentish consumers would be a great expansion for us” so “if you are interested in that as well, please do get in touch”