If you’re a part of Monzo‘s so-called banking revolution, you’ll probably have noticed some big changes to the app-based bank over the past few weeks. After cementing their reputation as the UK’s most innovative challenger bank, they’ve introduced a flood of new features to try and make their service even more appealing – whilst also dialling back in other key areas.
Monzo’s industry influence
People who bank with a traditional high street bank may have noticed that their own money management apps have had a makeover in recent years. From budgeting tools to better user interfaces, high street banks have been in a rush to show just how much they can offer mobile consumers. It’s not hard to argue that this is at least partly thanks to Monzo’s precedent: by proving that there’s a market for app-first banking, the challenger banks have forced their conventional competitors to innovate. This shows that banks like Monzo have done more than just disrupt the industry: they’ve influenced lasting change.
Recent app updates
The fact that other banks are starting to catch up with shiny new apps of their own means that Monzo will have more to prove if they want to woo new customers: they’ll need to show that they can also compete on a service level. This may be behind some of the recent updates, which have focussed on areas such as savings and bill payments:
- You can now open an interest-paying ISA with only £10. Until the September update, the minimum opening payment was £500, so this is quite a significant step towards making savings more accessible. The interest is up to 1.15% – not the most you’ll get, but perfectly reasonable.
- Strong customer authentication is now mandatory for all banks, but Monzo have implemented it in a characteristically clear and straightforward way. Every time you reach the £100 limit through contactless payments, you’ll need to make your next payment via chip and pin.
- Get paid early. More gimmicky, true, but still a nice little bonus for loyal members who have decided to go ‘full Monzo’ and get their salary paid into the account. Anybody who receives their salary via BACS can opt to have it dropped into their account at 4PM the day before payday, if they wish to.
- New salary sorter and bills pots. Going back to the basics of what made Monzo popular in the first place, these are app-based tools to make money management easier – and, once again, they’re aimed at encouraging people to start using Monzo as their primary bank account. The idea is to help people separate their money into bills, savings and fun money.
A hint of controversy
As we mentioned, not all of Monzo’s recent changes have been so well received. Significantly, they have pulled the plug on their packaged bank account, a subscription service which cost £6 and gave people access to different card designs as well as ‘events and swag’. There were also plans to add on extra, more conventional features like insurance and a higher fee-free foreign ATM withdrawal cap.
Unfortunately this didn’t pick up the interest that they were hoping, and just five months after opening the account they’ve opted to not only scrap the package but also fire the entire team working on it. This has sparked negative press coverage and a wave of refunds for those who’d already signed up. They have also received press coverage for scrapping the £5 incentive for referring new customers.
It’s impossible to know where Monzo will be in five or even one year’s time. But despite the slight controversy, it seems as though they’re taking steps to encourage people to take their services more seriously. Whatever happens, there’s no denying that the work they’ve done so far has shaken up the finance industry in a way that won’t be reversed any time soon.
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