Monese is among the UK’s digital app-based banks that are attracting moneyed urban millennials and serves customers neglected by the country’s established lenders
Among Britain’s digital app-based banks that are attracting moneyed urban millennials is Monese, which also courts customers neglected by the country’s established lenders.
In early 2000, Estonia-born entrepreneur Norris Koppel arrived in Britain and spotted a major gap in UK banking for newly arrived foreigners who had trouble opening traditional accounts.
Koppel was snubbed by banks owing to a lack of address documents and no credit history — and vowed to help those in a similar predicament.
In the nation’s booming financial technology or fintech sector, mobile phone app-based “neo-banks” such as Revolut, Monzo and Starling have established themselves as plucky upstarts.
Koppel’s lender Monese joined them, expanding to 31 nations in Europe with two million customers in only five years of operation.
Investor trust in Fintechs and the amount of investment being poured into neo-banks is actually very significant; it hasn’t really slowed down. 2019 was definitely a peak point so let’s see how 2020 goes, Koppel said.
It’s very clear that banking is going through fundamental changes . . . and there are a group of neo-banks including Monese who are on top of that wave, said Koppel.
The company describes itself as an electronic money institution that provides banking facilities — but it does not currently offer credit.
Monese is built for people who are moving to a different country, starting a new life, finding a better job, retiring, going for studies, or getting married somewhere else, Koppel said.
In Britain, about 80 percent of Monese customers are foreigners whose salary goes directly into their account. Groups such as Monese that only operate online carry out checks to verify the identity of new applicants to help fight money laundering. The app aims to compete with Revolut and Monzo, which have eight million and three million customers respectively in a fiercely competitive market.
Monese expects to turn a profit by 2021. It has a global workforce of roughly 400 people, describes itself as the “Uber of banking,” in reference to the popular ride-hailing app.
It’s a good comparison, Koppel said, noting that it was used by a lot of gig-economy workers at Uber and takeaway delivery service Deliveroo.
Britain’s traditional banking sector, which is still reeling from the 2008 global financial crisis and a string of product mis-selling scandals, retains a strong grip on personal banking, experts say.
Warwick University’s Andreas Kokkinis, who specializes in corporate law and financial regulation, said that fintech was gaining a foothold however.
The six biggest UK banks have 87 percent of the market share for current accounts so the remaining 13 percent is split among smaller conventional banks and building societies, and challenger banks, he said. However, challenger banks, which operate exclusively online and thus offer cheaper services, are popular among customers below the age of 37.
The articles are for information purposes only and Invest for Property shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.
Invest for Property does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.
Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.