Monzo has hit 4 million customers, with the five-year-old app-only bank saying it is signing up new accounts at a rate of 40,000 a week.
However, that rapid rate appears to be slowing.
The 4m customer milestone – which appears on the bank’s website – comes five and a half months, or 169 days, after Monzo, founded in 2015, reached its last milestone of 3m customers.
That means London-based Monzo actually saw a slowdown in customer growth, as the previous jump from 2m to 3m customers took just four months, or 119 days.
Last month, a survey found that British digital banks, such as Starling Bank and Revolut, added more than a million customers a month in the last six months of the year to notch up almost 20 million customers in 2019.
These banks added more than 6 million new customers in the second half of 2019. But it added that this immense pace growth slipped to 150 per cent from 170 per cent in the first half of the year.
The report also found despite that breakneck pace, the amount customers held in the accounts of these new app-only banks slumped by a quarter to £260 from £350, according to a new report from professional services firm Accenture. The average amount of cash held across all types of bank account is £3,214, according to research from comparison website Finder.
Digital banks dash for accounts
Tom Merry, managing director at Accenture Strategy, said “While there is no denying their popularity, profitability and competitive agility continue to be a challenge for neobanks. The fall in average deposits shows they still struggle to replace incumbents as the primary destination for monthly salaries.”
He added: “To succeed, neobanks will have to convert their rapid customer acquisition and cost-to-serve advantages into profit. To remain competitive with new players, incumbents will need to accelerate their move to lower-cost operating models and take advantage of their scale.”
In December, Monzo has hired the boss of its new US unit, as it joins other European digital banks in a scramble for the American market.
It has appointed TS Anil to the role at the app-only bank, which has three million customers in the UK. Anil will join the firm in early 2020 from Visa, where he was global head of products and platforms at the US credit card giant.
The challenger bank said Anil’s focus, as US chief executive, will be on driving growth in the US, hiring across product, operations and technology departments and overseeing ongoing talks with US regulators. The bank said it has 20,000 people on its American waiting list, across all 50 US states.
Monzo announced it would launch in the US in June, Berlin-based rival N26 opened its US operation in August, while London neo-bank Revolut said it would began US trading at the end of last year.