Digital-only challenger Monzo has reached the two million customer mark as sign-ups continue.
The number was reached just over two years after Monzo received its banking licence. It is also eight months after surpassing the one million account mark. According to the UK-based bank’s website, it signs up 35,000 new customers every week.
However, while customers are joining Monzo, they are not switching to Monzo in huge numbers. According to BACS’ 7-day switch statistics, between 1 October 2018 and 31 December 2018, Monzo made net gains of 5,953 customers switching.
More than £10.76bn ($13.7bn) has been spent through Monzo since the bank’s founding and £2.9m is sent between Monzo customers every day.
Eileen Burbidge of Passion Capital, and early investor, shared the news:
and there it is… 2 million customers (screen grab was 5 mins before midnight): 4 years to the day of their first ever tweet and public outing, 2 years 1 month after getting the banking license, 8 months after achieving the first 1 million… team @monzo take a bow 👏 pic.twitter.com/tOgPgXIUML
— Eileen Burbidge (@eileentso) May 19, 2019
Ian Bradbury, financial services CTO at Fujitsu UK & Ireland, shared his thoughts on the topic: “Today marks a milestone not only for Monzo, which is set to surpass two million customers, but also for the future of banking in general. The emergence of challenger banks has been a topic of interest for some time; and the trend towards digital-only banking isn’t going away anytime soon as more and more challenger banks become mainstream and gain market share.
“This is partly driven by the demands and expectations of the modern consumer. As customers hunt for convenience, low rates and speed, the sector is being revolutionised by technology, presenting banking with a hugely exciting future. According to our own research, 73% of the public believe that banking has already been dramatically changed by technology, while 95% of financial services leaders agree technology is driving change in their organisation. It will be interesting to see how these new digital services use fresh innovations to differentiate themselves in an increasingly crowded market.
“However, while Monzo and other challenger banks are able to leverage the latest tech to gain that competitive advantage, this comes with its own risks. In the race to gain market share, they must ensure that regulation, privacy and security remain a top priority.”
Busy time for Monzo
Instead, the bank now intends to focus on its business banking activities.
According to the bank, various factors were considered in this regard.
Among them are how many customers will be benefited by the service and whether it will let customers do something new.
In saying so, Monzo cited that only less than 0.1% of its customers have ever deposited a cheque.
It has also tied up with local fintech firm OakNorth to launch a suite of savings accounts that will pay interest.
The accounts will have varying interest rates, with the annual equivalent rate (AER) ranging between 1% and 1.53%.
Of the new offerings, two are cash ISA accounts.
The debut account to made available is an easy-access cash ISA with 1.14% AER.
Consumers can open accounts on depositing a minimum of £500.
The maximum deposit in case of ISAs and normal savings accounts is £20,000 and £500,000, respectively.
In addition, Monzo launched a customer support centre in Cardiff to support its customers.
The move, backed by a £950,000 grant from the Welsh government, will create 312 jobs over the next four years.
The new jobs add to the bank’s headcount of 500 at its London base.
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