Paul Rippon, Monzo: “A lot of what we do is quite unusual for a bank”

8 November 2016

Over the last few years a new breed of digital-first, mobile-only banks that operate through an app has emerged to challenge traditional financial institutions. It seems like a start of a significant transformation of the existing banking landscape for everyone. Paul Rippon, Co-Founder and Deputy CEO of London banking startup Monzo, told us about their innovative business model, financial products, and the key issues shaping the industry. Welcome to app-only banking!

Monzo is a bank famous for its unusual approach to financial services, but what exactly is unusual and unique in it?

We’re certainly overwhelmed by the support and interest we’ve had from customers, investors, regulators and media! As a team, we came together because we were frustrated with the banks and banking, it bore no resemblance to the rest of our lives and we were determined to build a bank that we, our friends and family would all be proud to use.

Paul RipponI think our approach is the result of not one, but a combination of unusual and unique things and there are three that I can identify with:

Firstly, there’s transparency, we are very happy to share, talk and listen!  We have 12,000 community forum posts where everything is openly discussed from our product roadmap, to pricing and tips on travelling abroad.  Transparency also exists within our company, where all emails can, and are, read by any member of the team.

Secondly, there’s our product.  Whilst other banks and would-be banks are working in secret we decided to get a product in the hands of our users/customers early and fast.  We owe an enormous thanks to our 50,000 alpha and beta users who continue to give us feedback every day.

Thirdly, ambition.  Our team is a combination of bankers and non-bankers, oops correction we are all bankers now!  We are building a ‘full stack’ bank which means we started with a blank sheet of paper, no legacy. We are about to move from our early pre-paid card and app to a current account, and then we will continue our journey to provide a financial control centre to a billion people worldwide.

There seem to be a lot of digital-only banks appearing on the scene, like Atom, Fidor Bank, Simple, and you. Why now, what has changed?

There’s a combination of reasons.  Changes in regulation here in the UK which makes setting up a bank easier (note easier not easy!), the availability of technology, investment, customers who are incredibly frustrated and lastly the incumbent banks themselves; their inability and unwillingness to fundamentally change leaves a huge gap between the service they actually deliver and what a new entrant can do.  Although the barriers to entry of setting up a bank are huge, so are the upsides for customers and new banks.  I think that is the power of entrepreneurship at its best.

Do you think that digital banks are better positioned for the future than traditional brick-and-mortar financial giants?

With smartphone penetration in the UK rising from 50 to over 80% in the last four years the trend is undeniably clear. More important that channel is banks that put the interests of their customers first and help to solve real problems.  They will be the winners.  Some of banks I’m sure will be digital, some traditional and some will be both.

When was the last time you visited a bank branch?

Ha ha. About a month ago.  I had a cheque that had been in my laptop bag for about a month and I needed to pay it in before it disintegrated!

Data security is one of the most important issues nowadays. How to convince people to trust a digital bank?

Security is something we take incredibly seriously. First up we are of the view that data is owned by the customer, not us.  We are trusted to look after that data and to use if for the customer’s benefit, it is from that our security policy and actions flow. We are very grateful for the trust so far shown in us by the 220,000 people who have registered to get a Monzo account.

Who is the typical customer of your bank? Do you think that mobile-only banks are a good choice for every person having a smartphone?

In the early days, our typical customer was an iphone using male living in London.  However, this has changed as we’ve developed the product, expanded to Android and begun to solve other problems like budgeting. With over 50,000 cards issued I’m not sure there is a ‘typical’ customer now and we seem to be appealing to a much broader group of users which is amazing.

The power of smartphones is incredible and we’ve only just begun to unlock that, however, mobile only banks aren’t a good choice for everyone.  If you need to pay in cash or meet someone in a branch then Monzo isn’t for you. However, if you want super helpful in app-chat 24 hours a day, real time notifications and the ability to freeze your card at the touch of a button, then we might just be!

What financial products do you currently offer?

Right now, we offer a pre-paid card (in lovely hot coral) and our app.  Very soon the features of a current account, like being able to receive your salary, will be available.

You have just launched an Android app. Does it offer the same features as your Apple app?

The Apple app had a few months head start and so we don’t have feature parity just yet.  We have an amazing growing team of Android engineers who are rolling out new features constantly so the big catch up is underway!  Peer-to-peer payments will be available soon with the Android app – that is incredibly popular with the Apple app, being able to send friends and family money with EMOJIs is a big favorite with Monzo users.

How many people are still on your Monzo card waiting list?

Lot’s and we’re getting cards to everyone as quick as we can so if you’re on the waiting list thank you very much for your patience!  We have around 220,000 people who’ve registered an interest and so far we’ve sent out about 50,000 cards.

Why did you decide to open an online store and start trading Monzo-related merchandise? It’s quite an unusual decision for a bank.

I think a lot of what we do is quite unusual for a bank! We’re trying to build something much more than that and we have an amazing community who are helping us do that — with feature suggestions, bug testing and hundreds of posts every week in our forum. They were asking us for t-shirts and other merchandise so they could be an even greater part of what we’re doing; and who were we to say no?!

How do you get feedback from your customers? Will you add a new option or feature if I ask for it on your Facebook page?

monzoWe have a range of methods for collecting feedback.  It can be done in app, in our community forum, via Twitter, Facebook and even in person!

Product features are the result of collaboration between our customers and the Monzo team. A lot of our app is directly due to the suggestions and feedback provided by our customers.  What’s your suggestion, I’m keen to know!

Finally, how much further can innovation in digital banking go? What biggest change are we going to see in the next 5 years?

The sky’s the limit!  Smartphone and general computing power is expanding and so I think 5 years is on edge of what we know today and where our imagination can take us. I think that there is going to be an explosion in discreet services and offerings that blur the boundaries between traditional banking products and other areas of our lives, like diary management or even health and fitness.  Then, there will be consolidation as a few firms emerge as ‘winners’, those most able to meet the needs of their customers.  It’s going to be an incredible journey.

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