Why you can’t create new Savings Pots – for now


(Simon B) #63

Lots of varying opinions in here, and they are all perfectly valid so thank you all as always for sharing.
This isn’t a great situation, but we’re working hard to resolve it.

But, it’s pretty nuanced.

Regarding transparency, I think the blog post is pretty comprehensive. We hit the agreed upon limit with Investec much sooner than we had anticipated, and it didn’t allow us time to line up the second provider. That’s our fault for not anticipating the demand for it. There’s no way around that, and for the people this directly affects, we’ve let them down.

But it’s interesting, because when we launched this, we saw a fair amount of feedback here along the lines of “Why would you put loads of savings into this when there’s better rates with X or Y bank”

Some people thought it unlikely that anyone would hit the individual limit of £250k. Well… some people certainly did, and the popularity of the feature meant that we had to try and speed up plans quicker than anticipated (I don’t have the exact data, this is just my general understanding)

What we learn from this is that the emotional and behavioural feelings we have around money, and specifically around visibility of the money (even with a transfer in/out delay!) are more important than economic logic.

I’m sure there’s still people scratching their heads about this who just can’t fathom why you’d put large sums of money into one account when you could put them into another account that gives you a higher interest rate.

But that’s the same exact logic that takes you down the path that the app (in any industry) with the most features must be the “best one” and therefore the one to use. But that is rarely the case. When Instagram first launched, there were competitors that had funding, did the same thing, and with tons more features. Most of those companies don’t exist anymore.

I digress, but I guess the point is that we all are guilty sometimes of thinking too rationally about things. Even those of us who have to make decisions here at Monzo, and it can be exacerbated by the fast-moving nature of a startup environment.

We’re big enough now that we don’t expect anyone to cut us slack when things go wrong. All we can do is explain what happened, and let you know that we are working very hard to fix it.


(Jai Sullivan) #64

I don’t make it sound like anything, I’m telling you my experiences — stop judging and keep this civil please. One of the questions I’m asked is ‘do they offer interest’ after I mention the many other benefits. I used to be able to say ‘they do’ now I have to say ‘they don’t’ and I know that will sway some.


(Jordan) #65

Okay so I get that “offering” a product and then “dropping” that same product could be seen as an issue/ not exactly fair, but they’re not saying the whole feature is gone completely? It is down for yes an unknown amount of time but that they are re-negotiating the deal with investec as they’ve almost reached the capacity of their original agreement.

What if Monzo completely over-egged their estimated on who would take up the pot and this cost them thousands of pounds in under-utilised investment accounts - you’d be fuming.

The investec pot is not an “essential” banking tool - anyone who is on Monzo, who is joining Monzo and who had opened an investec pot will still be able to operate in exactly the same way.

Major banks release products and drop them seemingly all the time - at least Monzo have openly come out and said what the problem is and what the planned solution is.

This is surely a great thing? Monzo can now go to investec and say “look we have a real following for this lets make the product even better”.


(Jack) #66

IMO peoples disappointment is because it was seen as a must have feature from the big list, and there isn’t any other option if that one supplier isn’t available. Other banks have many savings products on the go at any one time, hopefully this will be what Monzo’s marketplace is in a few years and thus dropping a particular product in replacement of another won’t be viewed as a step backwards.


(Jordan) #67

Okay but its not being exiled forever - and those who had one open can still operate their pot. Understandably irritating but hardly a reason to chastise Monzo for not being prepared or having foresight. They’re looking into it and will come back with a product (likely with better bargaining power now and so a better product). Monzo have grown exponentially recently and these things take time even when the product is running in parallel.

Other Banks, yes Monzo is a Bank but they are still a fin-tech/ challenger and will undoubtedly be newer to the products game than the established legacies. If you want an abundance of options then Legacies are still the place for you.

IMO this is good news, an initial period of marginal distaste yes but overall an opportunity to expand this area.


#68

That is crazy! Are you able to tell us what the total limit for Monzo was?

I think the difference here is that there is no “feature” involved - You stick your money in, you get interest - That’s it.

The fact that Monzo paid a lesser interest rate and made it more difficult to get your money compared with the likes of Marcus is almost irrelevant.

Clearly I’m being short sighted on the situation, but the only people I can imagine sticking £250,000 in a Monzo savings pot are friends of the company :joy:


(Splodf) #69

This is madness in a new startup that has made fairly significant losses.

I’m of a mind that Monzo might want to speak to these people about what would happen if anything went wrong!


(NM) #70

I think what would be best would be to look at how the product performs over x time period in order to provision for savings accounts etc.
you could run data analysis:
Looking at the predicted number of Savings account opened every week say and then look at actual numbers opened and be able to predict when there would be a cut off and then have the work flows ready so that you always have capacity or if you don’t a contingency workflow. Including contractual obligations etc.
The importance of these work flows is to allow for transitions:
No one likes change :raised_hands:
But having a transition isn’t as scary i.e in whatever time frame will stop offering or after x accounts have been opened.(I’m not a fan of the second one,it puts pressure on people.)
Combine Transition period with PR = :ok_hand:
This could also give you valuable data to feedback to the company to say actually the product didn’t perform well because of Y reason/reasons, therefore do we cut the product or advertise it better.(Internal data analysis). I mean it could maybe even be a stream of profit. We host your product for a year and then analysis how it performs etc and charge you the cost of the data
I would follow any failure up with qualitative analysis(Why?) primarily with customer calls etc.


(Nathan) #71

Slightly related/unrelated

If tom has all his fortunes in Monzo but knew they were going bust and withdrew his money just in time… would this be illegal/some form of insider trading?


(Dave Berry) #72

One of my goals for 2019 was to reduce my ‘life admin’. A huge amount of this comes from my finances! So I have ditched YNAB, which has saved me money too. But I have also ditched the AMEX, which has cost me £1.50 a week in lost cashback and I have around 4k in various pots earning me nothing and £1,500 in a Savings Pot.

My decision has been that the lost interest/cashback is less important to me than the simplification of having all my finances in one place.

The funny* thing is, if Monzo offered me 0.5% on the average balance in my pots, I probably wouldn’t even have bothered to open the Savings pot, and they’d be keeping .25% (difference between the BoE rate and what they were paying me) instead of the ‘commission’ from Investec of .15%. Stupid though that seems, I’m pretty sure I wouldn’t be the only one…

*funny strange, not funny hilarious, obviously


#73

I’m sure you aren’t the only one, although I’d have thought you’d be in the minority to go to such extremes in the quest for reducing your life admin.

My Marcus account takes up precisely 10 seconds of my month (checking that sweet sweet interest has gone in), and if I ever needed the money back, I can have it instantly.

I’m not sure how having a Monzo savings account would reduce that admin personally?


(Joe) #74

You’d be suprised! for me its the same but the other way around. I know I could make slightly more money putting my money elsewhere, but I don’t personally feel its worth the loss of visibility of my money I would have by having my money in two places instead of one.

I’m also with Mr Berry where I wouldn’t open another savings account if this one stopped working for a bit or they removed savings pots and gave you a flat interest rate. Hell, I had all my money in Monzo before they added the savings pot not making any interest. Banking doesn’t come natural to a lot of people and Monzo sure makes it easier.


(Tony, Secret Lemonade Drinker) #75

I have a Marcus account, but frequently forget to deposit anything into it. I think having pots has rendered me incapable of doing anything savings-wise outside the Monzo app, I’m all about setting up goals and picking the right background and whatnot now! I know it takes no time to do, but there you go!

If Monzo could create a virtual pot linked to my Marcus I’d be very happy indeed, and might even add to my meagre savings once in a while. Maybe (I make no promises, but Monzo should definitely do this anyway just to satisfy this need).


(Tristan Thomas) #76

Hey all,

Just reading through these posts and I think there’s probably one piece missing from our point of view:

Yes, we mucked up. Especially with hindsight, we should have had another savings partner lined up to avoid this and we didn’t. I’m sorry. The good news is that we’re really clear on the demand now and are working extremely hard to bring back Savings Pots as soon as we can. We’ll always communicate that openly with you and when we get it wrong, explain. We’re human and make mistakes and crucially, we learn from them.

I can’t wait for us to bring back Savings Pots, even better than they were :tada:


(Tony, Secret Lemonade Drinker) #77

Wait, what? :robot:


(Splodf) #78

Better interest rates confirmed by @tristan

Advice: sharpen pitchforks just in case.


(Tony, Secret Lemonade Drinker) #79

For sale: Monzo-branded pitchfork sharpener; light usage. £100 ONO.


(Rich) #80

There’s some interesting perspectives here and I’m broadly in the camp of this shouldn’t have happened.

However, one perspective that hasn’t been touched on yet is the positive aspect that if the Investec account balance has been (or is close to being) maxed out well in advance of forecast, this should also mean that Monzo’s share of interest earned is also ahead of forecast and therefore there’s a good potential revenue stream here.

I’d love to understand how much we may be talking about here, and whether it will make any material impact on the road to profitability - any Monzo Finance bods in the vicinity at all? :grin:


(MikeF) #81

With this talk of account limits etc with the partner, it looks like there may be a number of Interest bearing pots as time goes by, spread between different banks.

Because it’s the way Monzo works, I guess we’ll know these partners as they come and go but is there an arguement for hiding all of this and just offering a ‘pot v1’, ‘pot v2’ type presentation instead?

I’m not sure it makes any difference to me personally but it may to some.


(Splodf) #82

Not sure if it’s just me but I’ve always imagined a Monzo and (someone like) Triodos link up. Offering an ethical style investment account.

That would be nice to have!