For a few days I see the word everywhere – but I don’t bother to Google it. It sounds like a lesser-known Muppet or a new type of sausage, and I resolutely ignore the mentions of it that seem to flood social media. But then, just as I’ve resigned myself to forget about the whole thing forever, a good friend messages me to say: “Would you like to try Monzo? I have a golden ticket.”
Through the influences of last night I now have a Monzo card?
— Toby Kingslea (@Toby_Kingslea) January 23, 2017
Monzo is a startup mobile-only bank that allows you, among other things, to track your purchases via an app, create budgets, and freeze your card temporarily if you misplace it. Yet as well as being one of the first solely digital UK banks, it is also the first bank that has managed to get people tell-all-your-friends-and-scream-about-it-online excited. How? Tom Blomfield, Monzo’s CEO and co-founder, attributes this to one thing:
“Our strategy is pretty simple – make something people want.”
Blomfield says he and his team created Monzo because they are “hugely frustrated” with the state of traditional banking. “I’ve banked with NatWest for 16 years and I feel like I’m trapped in an abusive relationship… we want to do something that actually works for people.”
In its current iteration, Monzo is simply a pre-paid debit card that you can top up, with an app that will show you your purchases in real time. This might not sound like much, but it is sufficient to create a buzz with people frustrated that their current banking apps will only show their purchases (or whether they’ve slipped into their overdraft) two to three days later. The app also uses your phone’s geolocation chip to process when you’ve gone abroad and inform you of exchange rates. “Every time I go abroad with my traditional bank card it gets blocked for fraud,” says Blomfield. “We want to use the technology to remove a lot of the painful edges of banking.” In the coming months, the app’s restricted banking license will be lifted and they will offer a full current account with an overdraft.
Yet although Monzo is different, it is not unique. Multiple startup banks exist, including Loot, Atom, and Tandem, but Monzo has received the most publicity. The popstar Lily Allen has tweeted about the app (back when it was called Mondo, before a trademark challenge), and recently Ben Greenwood, a self-described “Social Media Influencer” has praised the bank. Blomfield says neither of these posts were sponsored, so how has Monzo managed to generate so much hype?
— lily allen (@lilyallen) May 28, 2016
“I wish I could say I signed up for Monzo in order to get my finances in order. To be honest, it was the draw of being part of something new,” says Brenda, the friend who first told me about the app. Monzo currently has a week-long waiting list, but gives current customers – of which there are 100,000 – a “golden ticket” to give to their friends. This means they can gain immediate access.
“It’s a really useful throttling mechanism so we don’t get overwhelmed with demand,” says Blomfield, “The waiting list has created a real scarcity about it, so we’ve played into that.” A large proportion of tweets about Monzo seem to mention golden tickets – proving the marketing strategy has been highly effective, and explaining the sudden hype.
But it’s not just the technology and marketing that are revolutionary about Monzo – according to Blomfield, it’s the entire ethos of the company. “We actually don’t hire that many people from banks because they seem to have been brainwashed,” he says. “When we interview our new job candidates we always talk about customers’ problems and how you might solve them and people who don’t work in banks come up with all these amazing solutions to really help people. People who have worked in banks typically come and say ‘Ah for that problem you need a credit card, for this other problem you need a fixed term loan’, they don’t think about what customers are really pissed off about and how to fix that.”
It’s at this point where things start to sound a little too good to be true. Yet Brenda tells me she is “continually impressed” by the app, and enjoys the lack of banking jargon and the use of emojis in notifications. “However there is one key thing that’s missing,” she says, “Trust. I still don’t use it as my full ‘current account’, instead I top it up with £20, £30 every couple of days. There is something preventing me from putting my full trust into Monzo – perhaps it’s because it hasn’t earned it.”
When I first look into Monzo, this too is my primary concern. It seems risky to trust a startup with something so crucial as your finances, and the amount of data Monzo collects is vast. “Your bank has a ton of your personal data, but they don’t use it for your benefit,” counters Blomfield when I express these concerns. “Our fundamental philosophy is that the data belongs to the customer.” He adds that each customer must agree before any of their data is shared with third-parties.
Blomfield also takes security seriously, and Monzo frequently ask hackers to attempt to infiltrate their servers as a way of uncovering any flaws. When it comes to a more traditional theft, Blomfield says services within your phone, such a thumbprint scanners, can protect the app. “If someone chops your thumb off then yes, they can steal your money.”
Yet Monzo still has to earn consumers’ trust. “Don’t switch from day one,” he says. “That’s like asking someone to get married on the first date. Put £100 on the card. Try it out, give it a go, and if stuff goes wrong, see how we deal with it compared to your traditional bank.”
Although talking to Blomfield reassured me, something else provoked me to download the app this weekend. On Friday, I lost and cancelled my bank card, only to discover it nestled in my coat pocket this morning. The ability to freeze a card temporarily – which Monzo offers – would have saved me a world of pain/hold music. In the end, then, the sales pitch is not about how revolutionary Monzo is – but how backward every other bank seems to be.