Zero market share isn’t usually considered a cause for celebration, but as UK-based fintech startup Monzo prepares to launch a smartphone-based banking venture in February of next year, CEO Blomfield sees distinct benefits in building a customer base from scratch.
Well, perhaps not quite from scratch. Established in 2015, Monzo (originally Mondo) has already carved out a niche in the pre-payment card market, but with the ink still drying on a newly-acquired banking licence, the company will soon be offering a current account, overdraft facilities and a debit card to what it hopes will be a rapidly widening pool of customers.
A Lack Of Legacy
And as Blomfield sees it, the lack of legacy is a distinct advantage. Unlike the UK’s biggest banks – namely Barclays, HSBC, Lloyds, Santander and RBS – Monzo has been free to build a banking platform exclusively for smartphone users. As a single channel offering, it doesn’t have to take into account the expectations of customers who prefer to transact via telephone banking or through a network of physical branches. Instead it can focus on creating a focused banking experience. But the ambitions of Blomfield and his co-founders run further. Monzo, is a stepping to the creation of a financial services marketplace.
In The Crowd
It won’t be easy.The UK banking market is awash with challengers. Some of them – like Metro Bank and Virgin Money – have physical branches and in many respects resemble the traditional high street players. Others operate under supermarket and retailer brands. Meanwhile, a new generation of digital-only banks is also emerging, including Monzo and the much-talked-about Atom.
All face the same challenge. Despite widespread concerns about their practices, established banks have proved remarkably adept at holding in to their customers. According to figures published by the Competition and Markets Authority, only 3% of retail customers switch account every year. Yes, we may all mistrust our banks and complain about the plain-vanilla customer service, but few of us Brits switch providers.