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Monzo Bank review – here’s an online bank that’s way ahead of its peers
I love Monzo’s vision for online banking – it’s outside the box and actually useful. It’s not just about balances and bank statements, it’s information and suggestions about where and how your money’s spent.
Improved technology with greater online security means people are more comfortable using their smartphone for everyday tasks… and that includes using it for banking.
But….
Why doesn’t the average bank go the extra mile to make its app a “one-stop shop” for all your banking needs? And why doesn’t it provide helpful information about the places you shop?
The answer – you need a smart online bank like Monzo that provides live transaction information with so much detail that it’s actually of use…
Great, this Monzo Bank review is for you!
Of course, Monzo’s not your average type of bank.
It’s a secure online bank for use with your smartphone, and it’s targeting a specific niche of people – savvy smartphone users, like you.
Monzo’s tagline: “Finally, a bank as smart as your phone”
Monzo Bank review – what is Monzo Bank?
Monzo’s a trading name of Focus FS Ltd, the latest startup, challenger bank to launch in the UK.
It’s testing its products and services in beta phase, whilst fulfilling pre-conditions to get an unrestricted full banking licence – for instance, having to raise approximately £20,000,000 in capital!
If all goes to plan, the regulatory authorities (Prudential Regulation Authority and Financial Conduct Authority) will lift the restrictions by early 2017.
Then, Monzo can give the high street and online banks a “run for their money”, offering a real online banking alternative.
Monzo realises that mobile banking needs to be easy and fully secure if it’s to be a smartphone success.
“[Monzo] is a new challenger bank in the UK, focused on making your financial life easier, rather than trying to catch you out with penalty fees and charges.”
[source: https://monzo.com/blog/2015/06/01/welcome-to-mondo/]
Who’s the founder of Monzo?
Tom Blomfield is the founder of Monzo.
He’s a management consultant and entrepreneur with forward-thinking ideas. Prior to starting Monzo, Tom created GoCardless (the UK’s largest direct debit processor), and worked with the Starling Bank startup.
Monzo brings a wealth of banking experience – its board of directors and executive team have 210+ years of retail banking experience between them.
“We’re trying to be the Facebook of banking”
says Tom Blomfield
[source: http://www.telegraph.co.uk/business/2016/03/26/banking-industry-primed-for-a-pocket-sized-revolution/]
Why did Mondo change its name to Monzo?
Have you heard of Mondo Bank (yes, Mondo with a “d”) or seen the colourful “M” logo before?
There’s no confusion – Monzo Bank originally launched as “Mondo”, but soon had to change its name following a trademark dispute.
Fortunately, the trademark dispute happened whilst still in the early launch stage so Mondo were able to find a solution without too much upheaval.
Knowing they had a supportive fan base (Mondo managed to raise £1,000,000 in just 96 seconds on the crowdfunding platform, Crowdcube, in early 2016) they wanted those supporters involved in the re-branding process too.
- the task: to think of an alternative name to Mondo
- the criteria: the alternative name had to begin with an “M” so the original logo could still be used
For two days in June 2016, the ideas flooded in with over 4,900 unique suggestions from over 9,000 people.
Adding those suggestions to their own ideas, Mondo set to work.
They wanted to make a decision on the new name as soon as possible…
And….
Within a couple of months at the end of August 2016, after the legal checks and undercover surveys, Monzo Bank was born!
Different name, same logo.
Monzo Bank review – how does Monzo compare to other banks?
- low overheads – no brick-and-mortar high street branch
- less susceptible to digital crime – unlike each high street branch being a network port open to attack, Monzo’s attack surface is much smaller
- constantly improving security – external security firms employed to find in-app vulnerabilities
- multi-factor authentication – user security is assured with multi-factor authentication such as thumb prints, image authentication and behind-the-scenes checks
- account management in one place – all account management is carried out via the Monzo mobile app
- 21st century technology – all data’s processed and reported in real time, including financial communication, alerts, withdrawals, deposits, budgeting tools, geolocation-marked transactions and peer-to-peer payments
- priorities – mobile banking’s the top priority, not an afterthought
- helpful – intuitive budgeting and money-tracking tools
- focus – main focus is on creating a great mobile personal current account
- future plans – to work with other providers to become an “intelligent hub for your entire financial life”
- compatibility – available on iOS and Android and soon to be on the AppleWatch
A neobank’s just a new online bank without a physical branch. All banking’s offered via mobile applications and/or a website.
It’s a neobank – an online bank without a branch
It joins other startup neobanks such Atom, Starling and Tandem in the UK, all of which were recently granted full banking licences. As of September 2016, only Atom offers a live account.
How will Monzo make its money?
Once Monzo has a full, unrestricted banking licence, it’ll make money by offering customers an overdraft, if needed.
– you’ll never lose money as a result of Monzo’s mistakes/problems that may arise
– your money will be held in a separate protected account by Wirecard (Mondo’s issuing bank) which is authorised by the FCA
A very small proportion of its (our) money will be lent to other private individuals who would like unsecured personal overdrafts with Monzo. The rest of the money sits in cash at the Bank of England.
When you’re nearing a zero balance, Monzo will prompt to ask if you’d like an overdraft for a small fee. You can either accept or reject their offer.
In the future, Monzo plans to do more personal lending as well as invest money in UK government bonds.
Monzo Bank review – Android app and iOS beta app for iPhone
The iOS app was launched several months ago and rolled out on a first-come-first-served basis, whereas the Android app became available just recently, again on a first-come-first-served basis.
I’m an Android girl, but my daughter has an iPhone and received Monzo’s app and pre-paid debit card a few months ago.
I agree it looks amazing. The amount of information that the app provides is both useful and impressive.
Monzo’s Android beta app
Whilst waiting for Monzo’s android app to become available, you can use it to check your position in Monzo’s beta queue, and publicise it on social media. By sharing Monzo on social media, it bumps you up the queue.
Here’s a screenshot of the queuing system – it’s pretty much the same for Android and iOS:
UPDATE: as of October 2016, I got the invitation code and downloaded Monzo to my mobile. It’s just as impressive as the iOS app, although not yet full featured. Additional features will be rolled out over time. My first impression – I received the Monzo prepaid card in a couple of days. It’s easy to top-up and I had no problems making a contactless payment. I love all the information Monzo provides about how, when, and where I spend money. If there’s any negatives, it’s that Monzo doesn’t use the interbank exchange rate, and you’re unable to use your account to purchase online until you’ve received the prepaid card – however, the exchange rate used is very close to the interbank rate, and it only takes two days to receive Monzo’s card in the post!
Monzo’s pre-paid debit Mastercard
For now, Monzo offers a prepaid debit Mastercard with a minimum first top-up of £100.
The card can be used wherever Mastercard is accepted – online, at ATMs and at retail outlets via chip-and-pin or contactless.
As soon as Monzo receives its full banking licence, the cards won’t need to be prepaid, and accounts will be issued with a sort code and account number allowing you to access faster payments, direct debits and standing orders.
Monzo uses the Mastercard exchange rate for currency conversions. This isn’t quite the mid-market rate, aka interbank rate, but it’s very close to it.
Sometimes there may be small fluctuations in the transaction amount due to exchange rate changes, but Monzo will notify you of the final figure.
Monzo’s mobile iOS app for iPhones – what does the Monzo app do?
The app has lots of features, such as:
keep track of your spending with an easy to follow “bucket” system with spending targets- live feed of your transactions in at-a-glance categories or the type of merchants you visit, eg travel, bills, eating out etc
- filter your history of expenditure with each merchant/retailer’s transaction
keep track of your spending with an easy to follow “bucket” system with spending targets
live feed of your transactions in at-a-glance categories or the type of merchants you visit, eg travel, bills, eating out etc
- live charts showing daily spend
- map showing location of where money spent
- ability for you to add your own notes and upload a photo of your receipts
map showing location of where money spent- at the top of the app home page is your balance and amount spent today, and beneath it, a list of your expenses in date order
- the app shows the merchant details/logo and amount spent (as well as the average and total spend to date with that merchant), and helpful notes automatically provided by Monzo, such as the type of card check made for the payment
- see how each merchant’s payment system works, eg if you bought a train ticket from Transport for London, Monzo would tell you that the payment’s subject to TfL’s fare cap. It also cautions about accidental duplicate charges when using TfL’s Oyster card payment system
- easily contact Monzo in-app for support or to report a transaction error, eg if a transaction is missing or incorrect, or to provide information to help Monzo locate a merchant, if not automatically provided in-app)
- unlock different in-app features, eg “search”
- set up regular standing orders to automatically top-up your Monzo account
- easy access to top-up your account
- easy access to temporarily freeze your card, eg if it was stolen or lost
- free P2P [person to person] transactions to your smartphone contacts
- instant payment notifications
unlock different in-app features, eg “search”
- travel reports – when you arrive abroad, Monzo automatically notifies you of the
current exchange rate, provides details about travelling with Monzo, and the option to categorise transactions as holidays or expenses
Whilst you’re abroad, your transactions are shown in both GBP and the foreign currency, with live exchange rate information
On your return, Monzo sends you a report of your trip with information on how much you spent and the exchange rates whilst abroad - zero fee currency conversions when using the Monzo card abroad
- zero fees/charges for using the Monzo card, home or abroad
travel reports – when you arrive abroad, Monzo automatically notifies you of the- in-app Monzo community forum to keep up to date with Monzo news and submit/respond to queries or comments
How to apply for a Monzo Bank account
Monzo’s still at the beta stage, having been rolled out to iOS users first, with Android just now starting to be rolled out (Oct 2016).
Get an invite link for the iOS and Android apps by visiting Monzo’s website.
Note: this review is a general resource and does not constitute professional advice. PeasOnToast.co.uk is not authorised by the Financial Conduct Authority with whom you should seek financial advice.
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A really good review on Monzo, we recently signed up and love it. We used a link found on the backpacker travels website to jump the queue which was nice and had our cards the next day. Don’t hesitate, get it guys