Monzo
Key Data
- Trading Name: Monzo Bank
- Legal Entity: Monzo Bank Limited
- Activities: Neobank
- Location: United Kingdom
- Regulation: Regulated by the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA)
- Key People: Tom Blomfield/Jason Bates/Gary Dolman/Paul Rippon/Jonas Huckestein
- News feed: Monzo
- Latest update: Aug 9, 2024
Background
Monzo Bank Limited is a digital neobank headquartered in the United Kingdom. Founded in 2015 by Tom Blomfield, Monzo surpassed the 10 million customer mark in Q3 2024. Monzo is recognized as the UK’s largest digital bank and ranks as the seventh-largest retail bank in the UK by customer numbers. Monzo is also cautiously expanding into the U.S. market and has plans for further European expansion, particularly in Ireland.
Financial Situation
For the financial year ending 31 March 2024, Monzo reported a pre-tax profit of £15.4 million. This is the first time the bank has made an annual profit since it was founded in 2015. Monzo’s revenue grew by 250%, reaching £880 million. This growth came from various sources, including more loans and subscriptions.
Offering:
Monzo offers a range of banking services designed to meet various customer needs through its mobile app. Here’s an overview of their current offerings:
Account Types
- Free Account:
- No monthly fee.
- Access to standard banking features, including a UK current account.
- Eligible deposits protected by the FSCS up to £85,000.
- Earns 4.10% AER (variable) interest on savings.
- Extra Account (£3/month):
- Includes all features of the Free account.
- Allows connection to other banks and credit cards.
- Offers virtual cards for enhanced budgeting and security.
- Advanced roundups and custom spending categories.
- Auto-spreadsheet feature for transaction tracking.
- Fee-free withdrawals up to £200 abroad.
- Perks Account (£7/month):
- Includes all features of the Extra account.
- Higher interest rate of 4.60% AER (variable) on savings.
- Three fee-free cash deposits per month.
- Additional benefits like an annual Railcard and weekly Greggs treat.
- Max Account (from £17/month):
- Includes all features of the Perks account.
- Comprehensive insurance options, including worldwide travel and phone insurance.
- Fee-free withdrawals up to £600 abroad.
Key Features
- Instant Access Savings: Accounts earn interest, with rates varying by account type.
- International Transfers: Facilitated through a partnership with Wise, allowing lower-cost transfers compared to traditional banks.
- Customer Support: 24/7 in-app chat and phone support.
- Security: Advanced security features, including real-time scam alerts and full regulation under UK banking standards.
- Pots: Users can create sub-accounts for budgeting and saving.
- Virtual Cards: For secure online shopping and budgeting, with the ability to create and delete as needed.
Monzo continues to innovate and expand its offerings, making banking more accessible and tailored to individual financial management needs.
Customer Feedback
On Trustpilot, Monzo holds a 4.1-star rating from more than 35,000 reviews with a corresponding “Great” trust level.
Experienced Issues
- Financial Crime Investigations: In 2021, the Financial Conduct Authority (FCA) initiated an investigation into Monzo for potential breaches of financial crime regulations, particularly concerning anti-money laundering controls.(BBC)
- Account Freezes and Customer Service Issues: Customers have reported sudden account freezes without prior notice, leading to difficulties in accessing funds. Additionally, there have been complaints about unresponsive customer support during these incidents. (Geldsparen Forum)
- Profitability Concerns: Despite rapid growth, Monzo has faced challenges in achieving profitability. In 2020, the bank reported significant losses and expressed concerns about its ability to continue as a going concern. (Dein Geld)
- Technical Outages: Monzo has experienced technical issues leading to service outages. For instance, in August 2024, the bank’s app went down, leaving thousands of customers unable to access their accounts or make payments. (The Scottish Sun)
- Ethical and Governance Criticisms: Monzo has faced scrutiny over its ethical practices and corporate governance. In 2023, the bank was criticized for excessive remuneration of directors, with the highest-paid director receiving £2.637 million, £2 million of which was in share-based payments.
Regulation
Monzo is authorized by the Prudential Regulation Authority (PRA) and regulated by both the Financial Conduct Authority (FCA) and the PRA. This regulatory framework ensures that Monzo operates under strict guidelines, providing a secure banking environment for its customers. Additionally, Monzo is a member of the Financial Services Compensation Scheme (FSCS), which protects eligible deposits up to £85,000 per person.
Conclusion
As a regulated and intensively audited bank, we put Monzo on our Green Compliance List. Based on the positive customer feedback, we have also placed the fintech on our Green Risk List.
