You might not have noticed, but a banking revolution is underway. Along with all the major high street banking institutions scrambling to outdo each other with their mobile offerings, there are a fleet of startups beginning to compete in the mobile banking market.
Unburdened by legacy systems, servers and requirements these more agile digital bank companies are building banks built around mobile which cut out a lot of cost and can update with purchases instantly. This gives them a huge opportunity to disrupt the market by giving customers faster access to more information about their money and how they spend it.
In this article I’m going to review how three different firms are trying to launch their offerings and how they’re doing as they each try to bring Elon Musk’s x.com dream of a wholly digital bank to life two decades later.
Monzo - 4/5
Monzo’s starting point has been focussed on the transactional side of banking, with a lot of the marketing focussing on tracking spend and ease of use, they’re looking to build up from being a current account to being a full blown bank.
At present, this is done via a pre-paid debit card that allows users to spend and track money based on what they top up. From this you get instant spending notifications, analytics to help you manage your budget and the ability to add receipts to your purchases via the app.
They are taking an intelligent approach to growth gradually scaling and adding users which should ensure their systems remain robust as they grow and in the near future they expect to be able to move from pre-paid cards into full current accounts allowing direct debits, transfers and payments.
Revolut - 3/5
Revolut have taken a slightly different approach with a far greater focus on international payment fees and exchange rates. Although again they have build a bank around an app they have gone a step further than Monzo at present and, in the UK at least, allow you to instantly create a current account via the app.
However, they don’t feature the same level of information on your spending as Monzo instead preferring to compete against conventional banks by doing away with international transfer fees and offering exceptional exchange rates.
Although this is undoubtledy a great area of frustration for a lot of people and, therefore, an excellent option to try and disrupt, I personally see it as less innovative than the facilities being offered by Monzo. Therefore, for the time being it would be my second choice.
Atom Bank - 2/5
Atom bank have taken a different approach again and it’s probably the least tradition “MVP” approach to launching a new bank. Instead of isolating a single feature to compete with, tracking spending for Monzo and foreign exchange for Revolut, they are trying to build an entire bank from scratch in an app.
In the long run this approach has excellent potential, the real competition point is going to be around customer service as they aim to create an “in branch” feel within the app and this could prove to be very popular, especially with less tech savvy users.
However, the reason for my low rating is very much focussed on the here and now. They currently only offer two services, fixed savings accounts and mortgage broking. We’ll ignore the mortgage offering for now as they are yet to digitise it and, instead, will focus on the fixed savers.
Although these have great interest rates compared to the offerings from high street banks you can’t help feeling they are primarily being used as a way of funding the build of the entire app. Also, as a point of difference competing on interest rates is a lot less innovative than building new features such as those available from Monzo and Revolut. Therefore, for the time being it looks like the one with least potential for me but that could change very quickly with a few new features.
Postscript - Bank Mobile
A final honourable mention must to Bank Mobile, although exclusively available in the US at the moment they have the most feature rich offering of any of the competitors discussed here so will undoubtedly be a threat when they land in the UK.