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Do your banking on your mobile phone. (Photo: Pixabay)

Mobile-only bank hits 1 million users

Up and coming challenger banks are giving financial giants a run for their money. British fintech unicorn Monzo is just the latest example.

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Monzo, the London based digital bank announced that they have reached 1 million customers that use their debit cards to manage their money and spend around the world, the company stated on their website.

Digital banking – in a smartphone

Monzo provides the concept of a community owned bank. They present themselves as “a bank that lives on your smartphone and built for the way you live today”. The digital bank is popular among millennials.

“It gives you real-time visibility and control. It’s one of those home-screen apps: you have five or six apps you use to live your life and Monzo is one of those things,” Tom Blomfield, founder and chief executive, told The Guardian.

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Crashing the servers in a crowd funding campaign

In 2016, the fintech bank entered the equity crowdfunding site Crowdcube. In about 1.5 minutes the firm had raised $1.3 million (about 11,4 MSEK) and crashed the servers of Crowdcube. A new record was set for the fastest growing crowdfund raise ever. Monzo went on to raise another $27 million (237 MSEK) in funding and as of that, became a reputable challenger bank.

Technology Unicorn

In august this year, the company was set to become a technology ‘unicorn’ after an investment round that would value the company at more than $1 billion (8,8 BSEK), according to The Guardian.

Other alternative banking providers and financial technology companies worth keeping an eye, according to the british newspaper are:

  • iBAN, a fintech using crowdfunding with the goal to launch new banking apps, such as peer-to-peer lending and free international transfers.
  • Atom Bank, a mobile banking application that offers a range of personal and business banking products. 
  • Starling Bank, a mobile-only challenger bank based in the United Kingdom, operating current accounts, business accounts, and a payments services scheme for merchants.

Customer centricity in banking

What these new actors have in common is how they place the customer at center of their business model. Interestingly, a global PwC survey from 2016 presented that 61 percent of bankers thought a customer-centric business model is very important. However, only 17 percent were really prepared for it.

These new actors use technological innovation that enable improved services and make it easier for customers to interact with their bank. Something that traditional actors struggle with due to complex infrastructure and large size. 

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