You do know the challengerās plans for this, right? I would explain myself but I donāt have time right now.
The plan isnāt just to give users access to the appās functionality within the challengerās apps is it?
You do know the challengerās plans for this, right? I would explain myself but I donāt have time right now.
The plan isnāt just to give users access to the appās functionality within the challengerās apps is it?
Iām more taken by the notion James raises about the potential for existing high street bank development teams to rapidly respond and narrow the excitement gap.
Ultimately it feels like functionality alone wonāt win the day - customer service, the softer stuff, will surely have a greater part to play. Both Monzo and Starling forums put a lot of store in the relationship account holders should have with their respective bank.
Sure, itās going to take both functionality & a good relationship to satisfy users. I think the challengers have to be strong in both areas.
Itās definitely not impossible for the legacy banks to catch up with what the challengers have now. As Iāve said before, theyāve only delivered the basics.
The question is, can the legacy banks catch up before the challengers innovate more, especially when it comes to the clever stuff that the truly digital challengers will be able to do.
And will they successfully reorientate their business model so that itās service, as opposed to product, orientated.
And thatās really the point. And even if they can, do they think they need to?
Itāll be fascinating to see quite what the genuine challengers will have delivered and embedded in 18 months or so.
And your latter point about the legacy business model:
Itād be one thing to refocus their developers into innovation - quite another to reorientate the whole approach to customer satisfaction. A big askā¦
I think many of the traditional banks would argue they orientated to a service approach a long time ago. Is there really product innovation in consumer finance? Theres has been tinkering around the edges but credit cards, overdrafts, mortgages havenāt really radically differed. That their service orientation misses the mark with customers is a important but it is being tolerated by customers.
For me (and l have mentioned this elsewhere) is when price comes into the proposition and whilst āfreeā banking remains the current fintech entrants will never really leverage their real benefit, that their cost are lower. Service is important too, but innovationā¦ can l live without notifications/emojis yes l probably can.
One of the real benefits of the internet is that the cost of use fell significantly and for things like Facebook, Twitter et al itās free if l sacrifice my personal data and insights. Until fintech entrants can tap into that, they will always have an enthusiastic base but will they wonāt significantly brake into mainstream.
My partner and l are very similar in many ways (not looks l have them) he doesnāt get my fintech thing. For him itās all about having stuff in the same place, interacting via the same channel etc. I say āwell thereās an API for thatā he shrugs his shoulders and says whatever l will stay where l am.
To get to a billion accounts there are many people like that to persuade and for me the easiest quickest way to influence them folk is through cost. Until cost is an issue in the UK fintech entrants wonāt storm the market. It will be really interesting to see how Monzo performs in markets where there is cost such as Europe and the US. My guess is whilst Monzo is born of UK itās more successful markets in terms of pick up, retention, income generation will be outside the UK.
Maybe they would but they havenāt. Hereās Monzoās co-founderās explanation of what that can really be -
I think we can all agree that, thatās not what the challenger banks are pinning their value proposition on
Iām not sure what you mean by this? The challengers will be analysing our personal data to provide insights & earn revenue.
You can get used to that, itās going to take a while for some people to see how what the challengers are doing is different
Cost is an issue (although not the only one), the legacy banks make about half their revenue from punitive fees - the fees that the challengers arenāt charging. Customers know this (even if they donāt know how the revenue models are structured) & they donāt like it.
Think my point was here was the internet became free on that premise, l am happy for my browsing history to be known used for insights. Am l happy to for my bank transactions to be used in that way. I am, not sure the wider population is ready for that.
Absolutely Banks have cloaked free banking in this model. I know itās not free! But for me it is my DDs donāt bounce, l never go overdrawn etc but some poor folk are paying for my āfreeā banking. But letās say l incurred a couple of charges a year, would that in my mind be resolved that the rest of my banking is free. Maybe. For me l think the fintech entrants need to get together and start pushing Government that they have a more cost effective sustainable business model than Banks. That would benefit those less well off through less charges and budgeting tools. People shouldnāt be paying Ā£8, Ā£15, Ā£25 for a returned direct debit when all it is one line in an electronic file being sent. Until we rid the notion that banking whilst in credit is āfreeā in this country l fear the market will not radically change.
Thereās only one way to find out
Iām not sure that people think like that. I assume that people feel entitled to āfreeā banking because (almost) nobody charges for it. So they donāt see any charges as being offset by the remaining services being free. But I could be wrong!
That would certainly be helpful!
I think you could take a completely different approach to 3d-secure - Iād quite like a version which just prompted you in the app to confirm the purchase with a notification - this would mean you need your phone for transactions which require 3d secure, but thatās fine. This would be much more secure than yet another password to remember (which many people probably reuse with other stuff), and would set Monzo apart. Eventually Iād quite like the option in Monzo to always require in-app approval of transactions over Ā£1000 say made by the card which could tie in to this quite nicely.
No it is not! You want to be able to do transactions even when your phone has a flat battery or off for repair.
Iāll be very suprised if Monzo doesnāt eventually implement something like this -
https://n26.com/n26-is-now-3d-secure/
which sounds a lot like that
Whilst I agree with you, I think you and I do have to accept that Monzo doesnāt want to be āmobile firstā but āmobile onlyā.
If you think that you may ever need access to your money in situations where your phone is unavailable (and you canāt use your card) I would strongly advise to have meaningful amount of money in a 2nd current account that doesnāt have such limitations.
I agree. I really would love a mobile 2FA based 3DS but it needs to have fall back that doesnāt require your phone. Now to avoid that fallback being a security hold then itāll probably need to more annoying ask you for some additional info
Yes, thatās exactly what I was thinking of Alex.
As to not having your phone, donāt try a 3DS transaction when your phone battery is flat I guess? Iād be fine with that tradeoff as it is such a rare situation. There have to be some tradeoffs in order to make the account work better than traditional offline banks, and if you want a bank which functions without a mobile, you should probably use a different one as well as monzo, because they are definitely focussed on your phone being with you (as an example see their location security feature, which you canāt use without the phone).
I agree it should be mobile only.
I just object to forcing use of 2FA thru the app
Iād ask then: If itās mobile only, isnāt 3DS requiring the mobile the logical and perfect solution? If you can use 3DS without mobile, it wouldnāt be mobile only anymore.
The way I see it is no bank is perfect and no bank ever will be. However think how long the traditional banks have been around and how much money they have to invest in R&D.
Now compare that to what Monzo has achieved in three years, starting from scratch and making every penny count. Personally I already think the Monzo mobile banking experience is far superior compared to HSBC for example, so am really interested to see the great features a year from now.
That said I donāt put all my eggs in one basket. I get paid in to my traditional bank account, then transfer so much of my salary in to Monzo that iām allowing myself to spend each month.
I use Monzo for my day to day spending and online purchases, then my traditional accounts for saving as itās simply not an area Monzo targets.
That works for me and I believe i get the best of what Monzo currently offers and the best of traditional banking.
That looks great! I find 3D Secure an inconvenience but necessity. The way N26 have implemented it would remove the inconvenience part
And a side-note:
The quality of narrative is high. Looking forward to seeing the N26 offering. Theyāll be a worthy player.