Company:Monzo (bank)

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Short description: British neobank


Monzo Bank ltd
Monzo
IndustryFinancial services
Founded2015; 9 years ago (2015)
HeadquartersBroadwalk House
5 Appold Street
London
EC2A 2AG[1]
Key people
Gary Hoffman, (Chairman)
Tom Blomfield, (President)
TS Anil (CEO)
ProductsBanking
Number of employees
1,551 (2019)
Websitewww.monzo.com

Monzo Bank Ltd (/ˈmɒnzoʊ/), is an online bank based in the United Kingdom.[2] Monzo was one of the earliest of a number of new app-based challenger banks in the UK.

Originally operating through a mobile app and a prepaid debit card, in April 2017 its UK banking licence restrictions were lifted, enabling it to offer a deposit account.[3] As of March 2020, Monzo had over 4 million customers.[4]

History

It was founded as Mondo in 2015 by Tom Blomfield,[5][6][7][8] Jonas Huckestein, Jason Bates, Paul Rippon and Gary Dolman.[9] The team originally met whilst working at Starling Bank. In February 2016, Monzo set the record for "quickest crowd-funding campaign in history" when it raised £1m in 96 seconds via the Crowdcube investment platform.[10][11][12]

Two weeks prior to the name change, Monzo was granted a restricted banking licence, by the Prudential Regulation Authority and the Financial Conduct Authority and in April 2017 these restrictions were lifted.[13][14] Monzo had a number of prepaid debit cards in operation which it issued to users for testing purposes.[15] These cards were in use until current accounts were made available to all and the prepaid programme was closed on 4 April 2018.[16]

On 16 May 2017, Monzo announced that over £250 million had been spent through its prepaid card, between 200,000 customers.[17]

Monzo initially traded as Mondo. On 13 June 2016, a company blog post announced that the "Mondo" trademark had been legally challenged by an undisclosed company with a similar name.[18][19] As a result, a naming suggestion contest was organised and the new name, "Monzo", was registered at Companies House under the legal name "Mondo Bank Ltd" in August 2016.[20]

On 17 July 2017, Monzo announced the current account preview and began inviting eligible customers to sign-up for a preview of the full current account.[21][22] Initially, customers attended events at the company's offices in London but cards were also sent out via post. In line with the company's general stance on transparency, the Monzo website includes a live counter showing progress on the rollout.[23]

In October 2017, Monzo announced that it would be discontinuing free ATM withdrawals abroad, replacing them with a free monthly withdrawal of up to £200 and a charge of 3% on subsequent withdrawals. This change came into effect on 18 December 2017.[24]

On 7 June 2018 Monzo announced an integration with IFTTT which allowed users to connect their account to smart devices and services. For example, connecting Monzo to Amazon Alexa.[25]

On 25 June 2018, Monzo announced their team up with TransferWise to provide international money transfers from within their Monzo app.[26] Existing TransferWise customer can connect their account to use along Monzo app. It was later announced in November 2018 that interest would be paid on savings (in 'Savings Pots' above £1,000) in collaboration with Investec.[27]

In October 2018, Monzo reached one million customers, and was also named the best tech startup to work for by LinkedIn UK.[28][29]

On 21 November 2018, Monzo added the functionality for users to pay cash into their Monzo accounts using PayPoint, charging users £1 for each deposit.[30]

On 28 January 2019, Monzo announced a partnership with Flux to add itemised receipts and loyalty points.[31] In addition to this, the API to create receipts was published by Monzo.[32]

In August 2019, the company announced that it had inadvertently logged 480,000 customer personal identification numbers, making them accessible to Monzo's internal team of engineers. The issue arose because PINs were transmitted in the query string of a HTTPS request.[33][34] That month the company also launched its loan products for customers.[35]

In March 2020, Monzo announced the creation of two business bank accounts for sole traders and small to medium sized businesses.[36] In May, Blomfield announced that he was moving from CEO to president of the company and TS Anil would become the company's CEO.[37]

Fundraising

In October 2016, Monzo announced an 'interim' funding round valuing the company at £50M and raised £4.8M in the process led by Passion Capital.[38] This round was followed by a second £2.5 million Crowdcube crowd-funding campaign with the total pledged quickly hitting the target amount.[39]

In February 2017, Monzo raised £19.5M from Thrive Capital, Passion Capital, and Orange Digital Ventures, which it intended to supplement with a crowdfunding campaign for an additional £2.5 million.[40]

On 6 November 2017, Monzo raised £71 million from several investors in a round led by Goodwater Capital. At the close of the round, Monzo was valued at £280 million.[41]

On 30 October 2018, Monzo became a pound “unicorn,” with an £85 million fundraising round valuing the company at £1 billion.

On 5 December 2018, Monzo held another £20 million Crowdcube crowdfunding campaign, reaching nearly £18 million in funding in less than three hours, and reaching the £20 million goal in just over two days.[42]

On 24 June 2019, Monzo raised £113 million in a Series F funding round led by Y Combinator's Continuity fund. This round gave Monzo a valuation of £2 billion.[43][44]

U.S. expansion

Monzo announced on 13 June 2019 that it would begin offering services in the United States , though it provided no timetable for an actual launch. During its announcement to expand, the company said that it would distribute about 2,000 debit cards to prospective members who attended events held by the company in major U.S. cities like Los Angeles, San Francisco and New York City. Along with retrieval of the debit cards, attendees were expected to offer the company feedback on their products and services.[45]

The company faces a more onerous regulatory environment in the US than in the UK. Financial technology is nationally regulated in the UK, and British regulators have a reputation of being friendly to such companies. By contrast, technology regulation in the financial sector is handled at state level in the US, with one consultant telling CNN that "US regulators are not that savvy as far as financial services are concerned. They've either been oblivious on regulation, or incredibly strict."[46]

Monzo will enter the US market through a partnership with Ohio-based Sutton Bank, and will retain many of its features, like instant spending notifications and contactless pay. Unlike in the UK, the company will not offer a money lending service to its US customers.[47] The company faces a highly competitive and heavily fragmented landscape in the US, with players ranging from tech companies such as PayPal and SoFi to a multitude of traditional banks that are heavily investing in digital platforms.[48]

Issued cards

The design for the coral-coloured current account cards.

Monzo initially issued (with partner company Wirecard[49]) a variety of alpha, beta and investor cards to its customers who wanted to be early adopters.[50] These were prepaid Mastercards which the user could top-up via bank transfer or via an existing debit card.[51] The balance on the card could then be spent via contactless, chip and pin, magnetic stripe or online. From early on, Monzo has issued cards in a neon "hot coral" colour - initially intended as a temporary measure during prototyping[52] - but later, a deliberate decision arising from the success of the "eye-catching" design.[53]

In December 2017, Monzo issued new Debit Mastercard cards to all its existing and new customers as the bank began rolling out current accounts. Customers signing up for the current account are issued a Debit Mastercard.[54]

Like all card providers, Monzo enforces a range of limits on ATM withdrawals, top-up amounts, single payments and the overall balance on the card.[51]

Mobile apps

A screenshot of the Android app, showing recent transactions.

Monzo has released mobile apps for both iOS and Android phones.[55] Payments made with the Monzo cards will trigger push notifications in real-time to phones running the apps, where historical transactions can also be viewed.[49] Users can categorise their transactions, freeze the card (if lost), mark company expenses and view an overview of their spending habits.[56]

Where available, the apps will show a map depicting the location at which the transaction took place, along with the company's logo.[57] Transactions will be auto-categorised based on the company involved in the payment, with data accuracy improved via crowd-sourced suggestions.[58]

A roadmap for Monzo's mobile apps and related services is publicly available to view and vote upon on Trello.[59]

On 29 September 2016, Monzo made the Android app publicly available for anyone in the UK to use.[60] This was preceded by a private beta in October 2015 with consumers who visited the office in-person to collect a card.[61]

Developer tools

Banks in the UK currently offer customers limited or no programmatic access to their financial data.[62] Whilst the UK Government is looking into legislation to require existing banks to comply and adopt standards for secure and open APIs,[63] Monzo has already released a prototype API based on the OAuth standard within a year of the company's founding.

The company has also hosted four hackathons[64] and previously maintained a "Monzo Developers" Slack channel for developer discussion and support. The API allows developers to view transactions and accounts, receive notifications for events via webhooks and create their own items to appear in the app.[65] The responses are encoded using JSON which allows for data access in any programming language with JSON support.[65][66]

Fraud detection

During June 2018, Monzo gained significant public interest after fraud analysts with the bank spotted signs of and publicly announced a Ticketmaster data breach in April 2018, before Ticketmaster had spotted the breach themselves, and two months before Ticketmaster admitted the breach had occurred.[67][68]

As part of its effort to fight fraud, Monzo was found to be freezing customer accounts, and was investigated by the BBC's Watchdog programme for this[69]. In a response to this investigation, the company claimed that many of these account closures take place if the bank "suspect[s] there's financial crime"[70] however affected customers explain that their money is frozen for weeks at times, and for legitimate customers, this is quite the issue.[71] Customers have alleged that their phone number has been blocked by customer services, and others directed to food banks.[72]

Limitations

The company has expressed its intention to move away from a number of banking traditions such as physical branches and chequebooks which it regards as obsolete. Co-founder Tom Blomfield said the bank "will not be right for everyone", and described the company's target demographic as those who value convenience and technical innovation.[73]

See also

References

  1. ↑ "Monzo Headquarters address". https://monzo.com/help/business-accounts/Monzo-address. Retrieved 3 June 2020. 
  2. ↑ "The UK's new breed of digital challenger banks". Techworld. http://www.techworld.com/startups/ranked-uks-new-breed-of-digital-only-challenger-banks-3635411/. 
  3. ↑ "Welcome to Monzo Bank!". Monzo. https://monzo.com/blog/2017/04/05/banking-licence/. 
  4. ↑ "Monzo sails past 4m customers" (in en-GB). https://www.altfi.com/article/6256_breaking-monzo-sails-past-4m-customers-but-growth-rate-slows. 
  5. ↑ Burn-Callander, Rebecca. "Banking industry primed for a pocket-sized revolution". The Telegraph. https://www.telegraph.co.uk/business/2016/03/26/banking-industry-primed-for-a-pocket-sized-revolution/. 
  6. ↑ Baker, Stephanie. "A Bank for People Who Hate Banks". https://www.bloomberg.com/news/articles/2015-08-18/mondo-s-ceo-wants-to-build-a-bank-for-people-who-hate-banks. 
  7. ↑ Carey, Scott. "The UK's new breed of digital challenger banks: Atom, Mondo, Starling and Tandem - Ranked". http://www.techworld.com/startups/ranked-uks-new-breed-of-digital-only-challenger-banks-3635411/. 
  8. ↑ Treanor, Jill. "Digital banking: Mondo hopes to become the Google or Facebook of the sector". https://www.theguardian.com/money/2015/jun/29/digital-banking-mondo-hopes-to-become-the-google-or-facebook-of-the-sector. 
  9. ↑ "GoCardless Founder Tom Blomfield's New Startup Is A "Full Stack" Mobile-First Bank". TechCrunch. https://techcrunch.com/2015/05/24/mondo/. 
  10. ↑ Dawson, Freddie. "App Bank Mondo Crowdfunds £1M In 96 Seconds". https://www.forbes.com/sites/freddiedawson/2016/03/04/app-bank-mondo-crowdfunds-1m-in-96-seconds/#4dce0073f4c6. 
  11. ↑ Williams-Grut, Oscar. "App-only bank Mondo is valued at £30 million in an oversubscribed £6 million fundraise". http://uk.businessinsider.com/mondo-bank-valued-at-30-million-in-6-million-fundraise-2016-2. 
  12. ↑ Turvill, William. "Mobile challenger bank Mondo reaches £1m crowdfunding target in 96 seconds, adding to £7m venture capital investment". City AM. http://www.cityam.com/235956/mobile-challenger-bank-mondo-reaches-1m-crowdfunding-target-in-96-seconds-adding-to-7m-venture-capital-investment. 
  13. ↑ "When do you launch?". Focus FS Ltd. https://getmondo.co.uk/faq/. 
  14. ↑ "Monzo, a UK digital-only challenger bank, granted full banking license". TechCrunch. https://techcrunch.com/2017/04/05/monzo-a-uk-digital-only-challenger-bank-granted-full-banking-license/. 
  15. ↑ O'Hear, Steve. "Mondo, the U.K. banking startup, opens public Beta". https://techcrunch.com/2016/03/17/open-for-spending/. 
  16. ↑ "Frequently Asked Questions". Monzo. https://monzo.com/faq/. 
  17. ↑ "200,000 Customers and £250,000,000 Spent!". Monzo. https://monzo.com/blog/2017/05/16/200k-250m/. 
  18. ↑ "Goodbye Mondo, Hello M...". Monzo. https://monzo.com/blog/2016/06/13/new-mondo-changing-our-name/. 
  19. ↑ "Startup bank Mondo is letting customers change its name". Business Insider. http://uk.businessinsider.com/mondo-name-change-trademark-users-chose-banky-mcbankface-2016-6. 
  20. ↑ "Mondo is now Monzo!". Monzo. https://monzo.com/blog/2016/08/25/monzo/. 
  21. ↑ "The Monzo Current Account Preview!". Monzo. https://monzo.com/blog/2017/07/17/current-account-preview/. 
  22. ↑ "Monzo launches current account preview on Android". SpecialistBanking. http://specialistbanking.co.uk/monzo-launches-current-account-preview-android/. 
  23. ↑ "Current Account Progress Page". Monzo. https://monzo.com/current-account/live/. 
  24. ↑ Price, Rob. "Startup bank Monzo is ending one of its most popular features — unlimited overseas ATM withdrawals" (in en). Business Insider. http://www.businessinsider.com/startup-bank-monzo-caps-free-overseas-atm-withdrawals-200-month-2017-10. 
  25. ↑ "Connect Monzo to Alexa". 8 June 2018. https://www.smarthomegeeks.co.uk/how-to/how-to-connect-alexa-to-monzo/. 
  26. ↑ Send money abroad with Monzo and TransferWise!, 25 June 2018, https://monzo.com/blog/2018/06/25/monzo-international-transfers/ 
  27. ↑ "Get interest paid on your savings!" (in en). https://monzo.com/blog/2018/11/01/savings-pots/. 
  28. ↑ "London gets another fintech unicorn as Monzo reaches £1 billion" (in en). 2018-10-30. https://www.standard.co.uk/tech/monzo-challenger-bank-unicorn-tom-blomfield-a3976146.html. 
  29. ↑ "LinkedIn announces top 25 start-ups to work for in the UK" (in en-GB). Evening Standard. https://www.standard.co.uk/tech/top-25-uk-startups-linkedin-monzo-a3949731.html. 
  30. ↑ "You can now pay cash into your Monzo account!" (in en). https://monzo.com/blog/2018/11/21/deposit-cash/. 
  31. ↑ O'Hear, Steve. "Monzo teams up with Flux to add itemised receipts and loyalty points". Techcrunch. https://techcrunch.com/2019/01/28/monzo-teams-up-with-flux-to-add-itemised-receipts-and-loyalty-points/?guccounter=1. Retrieved 29 January 2019. 
  32. ↑ A simple Monzo third party API client for demonstrating the new Receipts API. : monzo/reference-receipts-app, Monzo, 2019-02-03, https://github.com/monzo/reference-receipts-app, retrieved 2019-02-03 
  33. ↑ Stokel-Walker, Chris (2019-08-06). "Monzo's PIN security breach, explained". Wired UK. ISSN 1357-0978. https://www.wired.co.uk/article/monzo-pin-security-breach-explained. 
  34. ↑ Cimpanu, Catalin. "Monzo admits to storing payment card PINs in internal logs" (in en). https://www.zdnet.com/article/monzo-admits-to-storing-payment-card-pins-in-internal-logs/. 
  35. ↑ Tesfaye, Mekebeb. "Monzo has officially launched loans for its 2.6 million customers". https://www.businessinsider.com/monzo-introduces-loans-to-threaten-incumbent-peers-2019-8. 
  36. ↑ Green, Rachel. "Monzo is launching one free and one paid business account". https://www.businessinsider.com/monzo-expands-to-business-banking-2020-3. 
  37. ↑ "Monzo co-founder Tom Blomfield moves from UK CEO role to president" (in en-US). https://social.techcrunch.com/2020/05/20/monzo-co-founder-tom-blomfield-moves-from-uk-ceo-role-to-president/. 
  38. ↑ "Monzo Raises 4.8M in Interim Funding Round led by Passion Capital". Crowdfund Insider. https://www.crowdfundinsider.com/2016/10/91459-crowdcube-alum-monzo-secures-4-8m-interim-funding-round-led-passion-capital/. 
  39. ↑ "App-only bank Monzo's crowdfunding is almost three times oversubscribed after less than 24 hours". Business Insider. http://uk.businessinsider.com/monzo-crowdfunding-oversubscribed-crowdcube-24-hours-2017-3. 
  40. ↑ "Confirmed: UK challenger bank Monzo raises £19.5M with another £2.5M in crowdfunding planned" (in en-US). http://social.techcrunch.com/2017/02/22/confirmed-uk-challenger-bank-monzo-raises-19-5m-with-another-2-5m-in-crowdfunding-planned/. 
  41. ↑ "Challenger bank Monzo raises another £71M from Goodwater Capital, Stripe and Michael Moritz" (in en-US). http://social.techcrunch.com/2017/11/06/monzo-moolah/. 
  42. ↑ "Monzo is raising £20m in latest funding round" (in en-gb). https://www.crowdcube.com/explore/monzo-crowdfunding-round. 
  43. ↑ "Monzo, the UK challenger bank, raises £113M Series F led by YC’s Continuity fund at a £2B post-money valuation" (in en-US). http://social.techcrunch.com/2019/06/24/monzo-series-f/. 
  44. ↑ Cook, James (2019-06-25). "Monzo's valuation hits £2bn as the digital bank raises £113m in fresh funding" (in en-GB). The Telegraph. ISSN 0307-1235. https://www.telegraph.co.uk/technology/2019/06/24/monzos-valuation-hits-2bn-digital-bank-raises-113m-fresh-funding/. 
  45. ↑ Fuscaldo, Donna. "U.K. Digital-Only Bank Monzo Comes To The U.S." (in en). https://www.forbes.com/sites/donnafuscaldo/2019/06/13/uk-digital-only-bank-monzo-comes-to-the-u-s/. 
  46. ↑ Garay, Louise. "Monzo Expands Outside the UK, Eyes US Operations | W7 News" (in en-US). https://w7news.com/monzo-expands-outside-the-uk-eyes-us-operations/. 
  47. ↑ Warren, Tom (2019-06-13). "Monzo launches its ‘bank of the future’ in the US". https://www.theverge.com/2019/6/13/18677298/monzo-bank-us-launch-date-availability. 
  48. ↑ Horowitz, Julia (13 June 2019). "Britain's wildly popular Monzo banking app is coming to America". CNN. https://www.cnn.com/2019/06/13/tech/monzo-app-united-states/index.html. Retrieved 22 June 2019. 
  49. ↑ 49.0 49.1 "Mondo selects Wirecard as their prepaid card issuer". Wirecard. https://www.wirecard.com/newsroom/press-releases/newsdetail/mondo-selects-wirecard-as-their-prepaid-card-issuer/. 
  50. ↑ "What it's like to use a Mondo card and account". Business Insider. http://uk.businessinsider.com/56000-people-are-waiting-to-use-this-british-banking-startups-credit-card-heres-what-its-like-to-use-it-2015-12/. 
  51. ↑ 51.0 51.1 "Monzo Terms & Conditions". https://monzo.com/terms/. 
  52. ↑ "Monzo Card Design". Wired. https://www.wired.co.uk/article/monzo-card-design. 
  53. ↑ "Breakthrough brands: Monzo, a modern approach to brilliant banking". Fabrik. http://fabrikbrands.com/breakthrough-brands-monzo-bank-branding/. 
  54. ↑ Peyton, Antony. "Monzo gently rolls out current accounts". Banking Technology. http://www.bankingtech.com/911451/monzo-gently-rolls-out-current-account/. 
  55. ↑ "Monzo on Google Play". Google Play. https://play.google.com/store/apps/details?id=co.uk.getmondo&hl=en_GB. 
  56. ↑ "What is Mondo Bank (now Monzo)?". PC Advisor. http://www.pcadvisor.co.uk/buying-advice/gadget/what-is-mondo-bank-mondo-bank-review-app-only-smart-mondo-card-monzo-3644615/. 
  57. ↑ "A look inside Mondo, a bank that's just an app". Business Insider. http://uk.businessinsider.com/inside-banking-app-mondo-2015-8. 
  58. ↑ "Crowdsourcing Merchant Data". Monzo. https://monzo.com/blog/2016/04/11/crowdsourcing-merchant-data/. 
  59. ↑ "Monzo Transparent Product Roadmap". Trello. https://trello.com/b/9tcaMB4w/monzo-transparent-product-roadmap. 
  60. ↑ "Android is here!". Monzo. https://monzo.com/blog/2016/09/29/android/. 
  61. ↑ "We're Ready". Archived from the original on 23 May 2020. https://web.archive.org/web/20200523183615/https://monzo.com/blog/2015/10/30/we-are-ready/. Retrieved 23 May 2020. 
  62. ↑ "Data Sharing and Open Data for Banks". Fingleton Associates. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/382273/141202_API_Report_FINAL.PDF. 
  63. ↑ "Government could legislate to ensure open data in banking and other regulated industries by 2017". Pinesent Masons. http://www.out-law.com/en/articles/2015/december/government-could-legislate-to-ensure-open-data-in-banking-and-other-regulated-industries-by-2017/. 
  64. ↑ "Mondohack IV". Monzo. https://monzo.com/blog/2016/04/21/mondohack-iv/. 
  65. ↑ 65.0 65.1 "Monzo API Reference". Monzo. https://monzo.com/docs/. 
  66. ↑ Bray, T. (March 2014), The JavaScript Object Notation (JSON) Data Interchange Format, IETF, doi:10.17487/RFC7159, RFC 7159, https://tools.ietf.org/html/rfc7159, retrieved 13 September 2016 
  67. ↑ Priday, Richard. "The Ticketmaster hack is a perfect storm of bad IT and bad comms". https://www.wired.co.uk/article/ticketmaster-data-breach-monzo-inbenta. 
  68. ↑ standupmaths (25 July 2018), How to detect bank fraud with maths, https://www.youtube.com/watch?v=Kpl3BGYtY7g, retrieved 15 August 2018 
  69. ↑ "BBC One - Watchdog - Monzo" (in en-GB). https://www.bbc.co.uk/programmes/articles/2qS0HM6nBkcPMx0W8t7fqVJ/monzo. 
  70. ↑ "Our response to the BBC Watchdog report: Why we sometimes have to block or close accounts" (in en-GB). https://monzo.com/blog/2019/10/18/watchdog-response. 
  71. ↑ Magana, Gregory (24 October 2019). "Monzo caught flack for freezing customer accounts without explanation, leaving some without access to their money for weeks". Business Insider. https://www.businessinsider.com/monzo-account-freeze-leaves-customers-frustrated-2019-10?r=US&IR=T. Retrieved 6 June 2020. 
  72. ↑ Dilworth, Miles (22 October 2019). "Monzo freezes accounts with no explanation - and some customers claim the move sent them to food banks". Daily Mail. https://www.thisismoney.co.uk/money/saving/article-7601613/Digital-bank-Monzo-sending-customers-food-bank.html. Retrieved 6 June 2020. 
  73. ↑ "Meet Mondo, the app that's got the banks worried". The Memo. http://www.thememo.com/2015/06/25/meet-mondo-the-app-thats-got-the-banks-worried/. 




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