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Fintech has had an eventful journey since it first took off. The growing popularity of fintech’s framework has more or less re-imagined the industry in a rather intricate manner, leaving out such a strong impact in its trail that it will never really be the same. As by-products of this epic transformation, we are witnessing a whole new line of products & services. One such fresh introduction in the reign of fintech has been neobanks, more commonly referred to as digital banks. Based entirely in the realm of the digital world, neobanks have changed the dynamics of people’s relationships with their banks. The refined cluster of services along with a more interpersonal and seamless experience has reinvented the wheel in a way. Even though neobanks is still a relatively new concept, we already have an assortment of different banks to choose from, and one such digital bank that is catching everyone’s attention is Monzo. Founded in 2015, Monzo has achieved a reliable presence in this newly-founded sphere of neobanks. The company was one of the first few players that laid the foundation for the industry. Initially operating through prepaid debit cards, Monzo was finally allowed to expand its operations to offer current account services in April 2017. By March 2020, Monzo had a clientele base of 4 million already. Once they had gained a strong footing in the current account sphere, the company broadened their horizons even more by venturing into offering credit products like loans and overdrafts.
Monzo’s success story is better told by the whopping numbers it has achieved in such a short span. Last year, the company held $1.6 billion in customer deposits. Furthermore, as per the sources, it is signing up new customers at a rate of 40,000 per week. The astronomical numbers paint a vivid picture of Monzo’s prodigious stay in the industry so far. There has been such a strong belief around Monzo’s potential that fintech giants like Stripe have provided the company with financial backing on multiple occasions. Apart from them, Y Combinator has also made a sizeable investment in the neobank.
According to the company’s co-founder, Tom Blomfield, while Monzo is currently doubling down on the success of their current account services, the big picture goal for the company is to build a business that people can trust their money with for years to come.
“Getting to self-sustaining profitability is really important, and so for us, that means picking two or three things that will help us to get a step-change in revenue generation to get to profitability,’ Tom Blomfield said.
As a step towards achieving this objective, Monzo plans to wade into the business banking sphere along with offering paid accounts. Another service that is likely to go on the table soon would be creating a set-up within their application where you can see the assortment of your credit cards. This simplified and all-encompassing service is projected to attract new customers as well as more frequent traffic of the existing ones. This isn’t where Monzo’s future plans end though. The company intends to consolidate the strong foundations they have laid, and they want to do so by offering a whole financial spectrum in one place. There are working to form collaborations to make this possible. For instance, Monzo is highly keen on introducing alternative financial services by the way of recommending what kind of mortgage you should go for or what car insurance provider is best to fulfill your custom set of needs.
Monzo’s vision to simplify the financial industry and win customers through innovation and sustainable services has added a unique element to the neobanks picture. The market for online banks is expected to grow tremendously over the next decade, and it’s highly possible that Monzo could be a centerpiece of this growth, pulling the strings and carving new pathways for everyone.