With a scrappy start in 2015 as a prepaid card seller, Monzo turned into an amazing growth story over the last three years. It is now considered as one of the fastest growing challenger bank in the United Kingdom.
With well above 750K customers, it is seeking to fulfill all the financial needs of its customers ranging from debit cards to personal financé products. Due to the smaller size, low-cost structure, and limited physical presence, the challenger banks like Monzo are well positioned to quickly launch new products compared to large banks.
For instance, Monzo is planning to launch a business account on request of customers. Its business account will be focused on freelancers, small business owners, and sole traders. The business account would also come up with standard features for budgeting, international payments, Invoicing and expense tracking.
The challenger bank Monzo seeks to enhance its personal finance services and products as well. The bank plans to introduce Monzo Plus, which will allow users to insured their trips and access to emergency cash while traveling. The bank will charge a monthly fee for their services.
Along with other enticing features, the bank has set up a plan to start making money through lending. Its CEO said, “We’ll also work to generate revenue through lending. We started making overdrafts available in January, and around 37,000 people have now enabled them. Over the next few months, we’ll build new features that let people borrow in ways that are convenient, transparent and affordable. “
Besides customer products, this challenger bank is seeking to move into profitability as a business. The challenger bank Monzo has been creating their own technology to run their business operations – which they believe is helping in reducing the cost structure. According to 2018 annual report, the bank has reduced costs by 80% on active accounts compared to last year, driven mostly by building their own technology products and transaction processing systems.