Since its founding in 2015, it almost seems that Monzo’s most potent marketing technique has been its substantial word of mouth. Often you can’t even mention the company without one of your peers reminding you how fantastic it is. I recently opened my wallet at a bar and sparked a ten minute discussion of its merits among ordinarily financially apathetic friends. A joke was circulated on Twitter months ago that suggested that all Millennials were covertly employed to spread the word of Monzo, and it has done fantastically well to get its target user base on side.
Most important in all of this is how ripe for modernization the banking industry at large is. Monzo won’t get the immediate fanfare that, say, Uber had. Crucially, it’s not considerably cheaper than the current incumbents. The reason it stands to make ground on its long-established rivals is that, at this point, Millennials don’t have any connection with their banks. Because of this, the notion of using a bank that is both different and helpful is novel, and has clearly resonated with Monzo’s 200,000 users.
The most striking thing for those accustomed to using traditional banks will be Monzo’s app-only set up. With no branches, the only way users interact with the company is through their mobile phones. While some may find the lack of tangibility troubling, having everything go through the app streamlines nearly every task a user asks their bank to perform. Transferring money to other users takes just a couple of taps, receipts can be added to transaction logs using the phone’s camera, and cards can be frozen and unfrozen with just one tap if they are lost. Not having brick-and-mortar branches makes the experience of using Monzo convenient by definition, particularly when you consider that 45% of Millennials exclusively use their phones to perform banking tasks.
In fact, Monzo is doing all it can to distance itself from its competition, a mantra which extends as far as its recruitment policy. ‘We actually don't hire that many people from banks because they seem to have been brainwashed,’ CEO Tom Blomfield told the New Statesman. ‘When we interview our new job candidates we always talk about customers’ problems and how you might solve them and people who don’t work in banks come up with all these amazing solutions to really help people. People who have worked in banks typically come and say ‘Ah for that problem you need a credit card, for this other problem you need a fixed term loan’, they don't think about what customers are really pissed off about and how to fix that.’
Monzo’s success ties into how accustomed Millennials are to slick apps that have clearly put a lot of thought into their UX design. Ordinary banking apps are perfectly functional, but there’s a lot of clutter that is completely absent on Monzo’s stripped down interface. The home page presents you with recent transactions and current balance, along with the amount of money spent that day - i.e. all the information you need at a glance and nothing more.
It has also capitalized on a general sense that Millennials have a fraught relationship with personal finances. Blomfield has said that the company understands how little control many people feel they have over their financial situation, and the app aims to make it easier to get a handle on things. Ordinary banks do not give you a breakdown of where you’ve spent your money in the same way that Monzo does. Monzo identifies where your money is being spent and on what - clothes, groceries, entertainment, etc. - so you can get a better idea of where the pennies are going. The app also allows you to set monthly limits for spending on these different areas to help users micromanage their finances more effectively.
At the same time, the brand has managed to create a curiosity and fortunate sense of exclusivity around its now-iconic pink cards. The company put in place a waiting list for the physical cards in order to avoid being overrun by signups. The wait, though in many ways irritating, gives the user a sense that they’re signing up to something sought after and that they’re getting in there early, something the ‘beta’ tag helps to cultivate. It’ll be interesting to see how Monzo develops as it adds more features and can offer more of the products that its traditional rivals can, as well as whether it can stay scandal-free with regard to how it uses its users’ money. For now, though, it seems banking has been crying out for disruption, and Monzo has answered the call.