Startup bank Mondo raised £1m crowdfunding in 96 seconds(getmondo.co.uk)
getmondo.co.uk
Startup bank Mondo raised £1m crowdfunding in 96 seconds
https://getmondo.co.uk/blog/2016/03/03/crowdfunded/
79 comments
Can someone explain to me an appeal of Mondo as opposed to some other established online banks (like Ally for example) ?
the founders and team are well-established and have a proven track record, and the product is fantastic. I haven't come across a product this good in a long time.
Kind of weird that this is your 2nd comment in almost two years.
yeah I don't comment / post much I mostly lurk.
Why is that weird?
For starters, Mondo is based in the UK - Ally in the US
I'm not sure if there are any other UK based online banks, I couldn't find any in 30seconds of googling
I'm not sure if there are any other UK based online banks, I couldn't find any in 30seconds of googling
One rival is https://www.atombank.co.uk/
Also
https://www.simple.com/
http://starlingbank.co.uk/
https://www.ffrees.co.uk/
https://www.monese.com/
Not to mention a few of the big boys have "Internet only" brands: First Direct (HSBC), Smile (Co-operative Bank), etc. These typically have their own customer service and distance themselves from their parent operationally, while still leaning on that reputation.
One thing that concerns me about investing in Mondo is that their only fruitful exit strategy might be being bought out. People are notoriously relunctant to switch current accounts, and a bad decade for public faith in banks might mean people will likely stick with names they know.
They're also at least a year from launch afaict, and Android doesn't seem to be a priority. They could miss the boat.
https://www.simple.com/
http://starlingbank.co.uk/
https://www.ffrees.co.uk/
https://www.monese.com/
Not to mention a few of the big boys have "Internet only" brands: First Direct (HSBC), Smile (Co-operative Bank), etc. These typically have their own customer service and distance themselves from their parent operationally, while still leaning on that reputation.
One thing that concerns me about investing in Mondo is that their only fruitful exit strategy might be being bought out. People are notoriously relunctant to switch current accounts, and a bad decade for public faith in banks might mean people will likely stick with names they know.
They're also at least a year from launch afaict, and Android doesn't seem to be a priority. They could miss the boat.
Small nitpick - First Direct started out and remains a telephone bank. Their website and app are OK but their phone service is what distinguishes them.
Disclosure: satisfied customer.
I disagree, their app (slow) and online banking (design) are terrible ;). That said, I can't fault their customer service either.
This is disingenuous, these aren't banks just UI.
They won't have a single branch either, unlike these others (or their parents). Apart from Atom they're the only ones like this.
Monese and FFREES aren't even banks by definition either.
I've been following Mondo for ages the only true bank like it is Atom & Starling. Starling isn't exactly in the same category though. Someone made a graphic to show the differences. Not sure if I can find that.
They won't have a single branch either, unlike these others (or their parents). Apart from Atom they're the only ones like this.
Monese and FFREES aren't even banks by definition either.
I've been following Mondo for ages the only true bank like it is Atom & Starling. Starling isn't exactly in the same category though. Someone made a graphic to show the differences. Not sure if I can find that.
> and a bad decade for public faith in banks might mean people will likely stick with names they know
Or, equally, make them switch to names they don't know and therefore don't distrust
> People are notoriously relunctant to switch current (checking) accounts
A big part of their pitch is being able to open an account on your phone in 30 seconds. We'll see if they're actually able to successfully market that though
Or, equally, make them switch to names they don't know and therefore don't distrust
> People are notoriously relunctant to switch current (checking) accounts
A big part of their pitch is being able to open an account on your phone in 30 seconds. We'll see if they're actually able to successfully market that though
Well, I guess we'll see. Many UK banks currently promise a 7 day current account switching guarantee. Despite this, after 5 full working days, I'm still waiting for a sodding e-mail from one bank that will allow me to start the process. I have no reason to believe Mondo will be able to maintain an "open your account in minutes" promise, even if they start business that way.
When I first immigrated to the UK it took me more than 6 months to establish a bank account because I was stuck in a catch-22 lack of local identification (which is all BS as the identity requirements are up to the bank). Mondo's approach is a lot saner, and there's a lot of segments of society that are otherwise underserved that they can capitalise on.
If you're in the UK then the appeal is that they will be available in the UK.
To people saying "UK" as a selling point, doesn't ING work in the UK as well? I'm not saying ING is the future of banking by all means, but they're pretty much (totally if you want) office-less.
I know precious little about the UK banking system. Is there an equivent to the US's FDIC or Canada's CDIC?
If you mean deposit safety there is the FSCS which protects account up to £75k (~$100k)
This is a bit dishonest.
They haven't raised £1m, they've had enough people sign up as "interested to invest" to reach £1m if everyone follows through.
I signed up to invest £1000, but I haven't paid yet and have absolutely no obligation to, and as far as I know I also don't have to invest the full £1000, I just can't exceed that.
edit: Their crowdcube page shows them having £600k so far
They haven't raised £1m, they've had enough people sign up as "interested to invest" to reach £1m if everyone follows through.
I signed up to invest £1000, but I haven't paid yet and have absolutely no obligation to, and as far as I know I also don't have to invest the full £1000, I just can't exceed that.
edit: Their crowdcube page shows them having £600k so far
This is nuts I don't know of another crowd source that raised so much so fast. How did you hear about them to invest, and why did you?
I heard about them on Hacker News I think.
I invested mainly because I like the idea of a bank where I can do everything online. There's no reason I should still have to call or go in to a store to change my address/unblock my card (because of their crappy fraud detection) etc
I invested mainly because I like the idea of a bank where I can do everything online. There's no reason I should still have to call or go in to a store to change my address/unblock my card (because of their crappy fraud detection) etc
>I invested mainly because I like the idea of a bank where I can do everything online.
Is this really unavailable in the US? Here in Canada, PC Financial has been operating like that for well over a decade. Sure, they have kiosks in some of their grocery stores for those people who want to talk to somebody (which is genius, really), but it's entirely virtual. I've operated almost exclusively online, outside of lost cards and things of that nature. Ordering cheques, creating new accounts, switching pins, transferring money, it's all a couple of clicks.
>There's no reason I should still have to call or go in to a store to change my address/unblock my card
So you'd prefer your bank didn't freeze the card based on what they deem to be suspicious activity? Good luck to those banks...
Is this really unavailable in the US? Here in Canada, PC Financial has been operating like that for well over a decade. Sure, they have kiosks in some of their grocery stores for those people who want to talk to somebody (which is genius, really), but it's entirely virtual. I've operated almost exclusively online, outside of lost cards and things of that nature. Ordering cheques, creating new accounts, switching pins, transferring money, it's all a couple of clicks.
>There's no reason I should still have to call or go in to a store to change my address/unblock my card
So you'd prefer your bank didn't freeze the card based on what they deem to be suspicious activity? Good luck to those banks...
> Is this really unavailable in the US?
This is in the UK, and it might be available but certainly not with any of the major banks
> So you'd prefer your bank didn't freeze the card based on what they deem to be suspicious activity?
They'll still block cards on suspicious activity, but they allow you to manually unblock/block cards using the mobile app, and they can also use your phone location in their algorithms if you open the app while abroad
This is in the UK, and it might be available but certainly not with any of the major banks
> So you'd prefer your bank didn't freeze the card based on what they deem to be suspicious activity?
They'll still block cards on suspicious activity, but they allow you to manually unblock/block cards using the mobile app, and they can also use your phone location in their algorithms if you open the app while abroad
> This is in the UK, and it might be available but certainly not with any of the major banks
I recently opened an account with HSBC fully online; didn't need to go into a branch. Think I have been to my Santander branch once over 4 years. I think the real advantage of 'online only' is not for consumer convenience but for lower operating costs on part of the bank. Smile and Egg were online only banks created in the late 90's, so the idea isn't new.
I recently opened an account with HSBC fully online; didn't need to go into a branch. Think I have been to my Santander branch once over 4 years. I think the real advantage of 'online only' is not for consumer convenience but for lower operating costs on part of the bank. Smile and Egg were online only banks created in the late 90's, so the idea isn't new.
I guess we might disagree on the definition of major bank, but I've had an account with Smile[0], part of the Co-Operative Bank, for over 10 years. It's an Internet only bank, with no physical branches. I've always done everything online. What does Mondo offer that Smile doesn't?
Also, as it is actually part of the Co-Operative bank, on the rare occasions where I've needed to withdraw a large lump sum of cash, I've been able to use those Co-Operative branches (that's happened about three times in 10 years).
I also have a Number26 account,[1] which I only opened a few months ago. Again, I don't see the Mondo advantage. In the Mondo Beta phase customers must be London based and iPhone users. No such Number26 restrictions.
I suppose I just don't understand the Mondo hype. They're good at marketing, but don't seem to offer much that isn't already available elsewhere.
[0] http://www.smile.co.uk
[1] https://number26.eu/
Also, as it is actually part of the Co-Operative bank, on the rare occasions where I've needed to withdraw a large lump sum of cash, I've been able to use those Co-Operative branches (that's happened about three times in 10 years).
I also have a Number26 account,[1] which I only opened a few months ago. Again, I don't see the Mondo advantage. In the Mondo Beta phase customers must be London based and iPhone users. No such Number26 restrictions.
I suppose I just don't understand the Mondo hype. They're good at marketing, but don't seem to offer much that isn't already available elsewhere.
[0] http://www.smile.co.uk
[1] https://number26.eu/
I'm a Mondo user. Things I like about it:
- no login bullshit (no pinsentry, or being timed out after 5 minutes or whatever)
- instant card freeze/unfreeze from the app. I don't have to talk to anyone to do it
- push notifications for every purchase (including full text entries for where the transaction was, and a cute little topical emoji)
- no hassling with PDFs of my transaction history, there's a god-damned API (and for the average consumer, there's the potential to have a constellation of 3rd party apps to deal with anything on the API). There's also in-app transaction breakdowns (for instance, I can see how much I spend in a particular category, or at a particular place). SHOW ME ANOTHER BANK WITH AN API
- I always know how much money I have in the account; there's not "available balance/actual balance" bullshit.
Honestly the main thing is that's really easy to use. I'm generally terrible at keeping track of how much money I have (usually because I avoid cash machines (I don't know who's still using cash in London, pretty much everything is contactless) and logging into online banking is a hassle). With Mondo, I can find my balance in one tap.
And yeah, they've earned my loyalty and I invested in them yesterday. Sign up for a card, use it, then criticise it.
- no login bullshit (no pinsentry, or being timed out after 5 minutes or whatever)
- instant card freeze/unfreeze from the app. I don't have to talk to anyone to do it
- push notifications for every purchase (including full text entries for where the transaction was, and a cute little topical emoji)
- no hassling with PDFs of my transaction history, there's a god-damned API (and for the average consumer, there's the potential to have a constellation of 3rd party apps to deal with anything on the API). There's also in-app transaction breakdowns (for instance, I can see how much I spend in a particular category, or at a particular place). SHOW ME ANOTHER BANK WITH AN API
- I always know how much money I have in the account; there's not "available balance/actual balance" bullshit.
Honestly the main thing is that's really easy to use. I'm generally terrible at keeping track of how much money I have (usually because I avoid cash machines (I don't know who's still using cash in London, pretty much everything is contactless) and logging into online banking is a hassle). With Mondo, I can find my balance in one tap.
And yeah, they've earned my loyalty and I invested in them yesterday. Sign up for a card, use it, then criticise it.
Apart from the API, which I just haven't looked into, my Number26 account has all of those things covered. I'm also not restricted to being a London living iPhone user.
I just don't understand the Mondo hype. Their service isn't unique in Europe and with their beta restrictions, I think their offering is behind some competitors.
I just don't understand the Mondo hype. Their service isn't unique in Europe and with their beta restrictions, I think their offering is behind some competitors.
I'm not sure if any other bank provides their own API for people to hack their own accounts with, but all my high street bank accounts are accessible to an ecosystem of third party apps that do things like transaction breakdowns via Yodlee (an API intermediary)
If you ask the bank they'll let you use it. I's still in a sort of beta phase but all UK banks have to have them soon under a HM treasury directive on 'Open Banking'.
Isn't Number26 Germany only for the moment?
He said he didn't want to have to physically visit a branch to unblock his card, not that he wanted a card without fraud protection.
Ally Bank?
Simple had the exact same idea years ago. I think they are still around and doing well although I have not looked at them in a while. (I think last time I looked you needed android or iOS and I am a windows phone user.)
Simple only went so far. They are just a nice interface on top of another bank. Mondo are becoming a full bank themselves.
I spoke to Tom (CEO of Mondo) at HN London about Simple. His take is that Simple failed, and that Mondo are following a different path.
I'm not clued in enough to know the benefit of being a bank vs. building a UI over a willing banking partner's service.
I'm not clued in enough to know the benefit of being a bank vs. building a UI over a willing banking partner's service.
I really like the idea, but mainly as a driver for the other high street banks to do better. While I don't have the sort of money where I'd actually lose anything if Mondo failed (the government insures everything up to about £35k) I can only imagine how much hassle it'd be to try and move everything away from them if they did fail - especially if they failed in a way that meant they closed their mobile app API down without notice.
It's worth noting that Mondo are not insured yet, so any money in there now is not insured.
Until they get accredited all the funds are stored by Wirecard, their issuing bank, which is insured
How will a pure online bank be any better ... What guarantees that their fraud detection will be any better?
Second, I dont know about your situation but for us Austrians getting my money from the ATM is free because traditional banks finance the ATM infrastructure. As there are now more and more online banks in the future I will have to pay once I want my money because online banks effectively utilize the infrastructure created by traditional banks.
Second, I dont know about your situation but for us Austrians getting my money from the ATM is free because traditional banks finance the ATM infrastructure. As there are now more and more online banks in the future I will have to pay once I want my money because online banks effectively utilize the infrastructure created by traditional banks.
The transition was subtle, but these days [checking] banks are actually just Software/API companies. They provide an online account that supports the established electronic money transfer protocols in whatever country you happen to live.
The fact that they have a network of retail stores in which you can talk to a salesperson about a loan is just a hangover from history. A bank without those elements would probably have much lower costs.
The fact that they have a network of retail stores in which you can talk to a salesperson about a loan is just a hangover from history. A bank without those elements would probably have much lower costs.
If we assume that when Mondo raised from their investors a year ago - £2m for around 20-30% (assumed) of the company (http://techcrunch.com/2015/06/30/mondo-gets-passionate/), how do you feel about the £1m valuation on 3.3% today?
Which bank is this? I have have cards with Barclays and MBNA in the UK, and neither makes you visit them to unblock cards. At least they've never made me do so.
First direct?
I like there's absolute no fees when using the debit card abroad and you get the exchange rate 'at cost'. There's a building society that does this but it needs 5k or 500 a month in deposits
I absolutely love that because I visit my family quite often and I'm usually ripped off with fees.
I heard about them when they were applying for their license and just felt lots of people would find it appealing. While it is making less money they save a lot too.
I absolutely love that because I visit my family quite often and I'm usually ripped off with fees.
I heard about them when they were applying for their license and just felt lots of people would find it appealing. While it is making less money they save a lot too.
They've been talked about on HN more than once. Pretty sure that's how I heard of them.
I invested to show support, I've had various current accounts and the usability has always been really poor. Time for something to shake the uk banks up a little, hopefully make them care about their customers a little more.
I invested to show support, I've had various current accounts and the usability has always been really poor. Time for something to shake the uk banks up a little, hopefully make them care about their customers a little more.
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What they did is essentially handle crowdcube's load.
They couldn't take all of them at once so they made an app that could and sent the links to the first 1m pledged users gradually, so not as to crash their servers.
But it is far from dishonest, when you pledge to crowdcube they don't take the money anyway, at least until after the round is over.
Also a few people got in on Monday so they actually raised a bit more than 1m, the last few on crowdcube with the links valid links wont get through.
In addition to those that don't get a chance to invest there's a whole line of people above the 1m..
They couldn't take all of them at once so they made an app that could and sent the links to the first 1m pledged users gradually, so not as to crash their servers.
But it is far from dishonest, when you pledge to crowdcube they don't take the money anyway, at least until after the round is over.
Also a few people got in on Monday so they actually raised a bit more than 1m, the last few on crowdcube with the links valid links wont get through.
In addition to those that don't get a chance to invest there's a whole line of people above the 1m..
I fell outside the 1m 36s cutoff, despite my system clock still reading 13:01 when I got confirmation, probably only because I stopped to skim the T&C.
I got stuck on their annoying typeform. I was on my mobile and agree wasn't clicking properly it kept going back. Then I was too late. So.. it could be worse!
I should point out that Mondo isn't the only online only bank there's also FFREES and Monese that are already functional.
Monese isn't a bank and neither is FFREES (they say so on their website)
> https://register.fca.org.uk/ShPo_firmdetailsPage?id=001b0000...
Mondo will offer banking services (lending via OD)
> https://register.fca.org.uk/ShPo_firmdetailsPage?id=001b0000...
Mondo will offer banking services (lending via OD)
I was ready to go at the time it opened (1 pm), and I actually read a bit of the disclaimer before I put in my information.
At finished at 1:02, and was put on the waiting list. Needless to say I was a bit angry I was less than a minute away.
At finished at 1:02, and was put on the waiting list. Needless to say I was a bit angry I was less than a minute away.
Totally not a pre-organised marketing stunt.
So? Good for them for jumping on the opportunity. Heaven forbid a startup try to make a name for itself...
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This news is important for banking in the UK for the following reasons:
- UK banks are slow to innovate and people (especially younger generation) are getting annoyed. People want a bank that is digitally strong, Mondo's 30k waiting list proves this.
- Banks will become more like platforms. Number26's partnership with TransferWise is an example of this beginning. See Clayton Christensen illustrate this https://youtu.be/oCKZwrfysbM?t=1h19m28s
- The UK is trying to make banking more competitive (last 5 years has had applications for more than 5 new banks, before this there was 1 new bank in 150 years). This policy is working.
What remains to be seen is whether Mondo will make money in the way a traditional bank does.
IMO the biggest challenge for a new banks is customer acquistion, and it looks like Mondo has a pretty good handle on this.
- UK banks are slow to innovate and people (especially younger generation) are getting annoyed. People want a bank that is digitally strong, Mondo's 30k waiting list proves this.
- Banks will become more like platforms. Number26's partnership with TransferWise is an example of this beginning. See Clayton Christensen illustrate this https://youtu.be/oCKZwrfysbM?t=1h19m28s
- The UK is trying to make banking more competitive (last 5 years has had applications for more than 5 new banks, before this there was 1 new bank in 150 years). This policy is working.
What remains to be seen is whether Mondo will make money in the way a traditional bank does.
IMO the biggest challenge for a new banks is customer acquistion, and it looks like Mondo has a pretty good handle on this.
> UK banks are slow to innovate
This is hardly true. The UK is one of the only countries which has a couple of simple features in banking no other country has:
- Instant, Free transfers, including from one bank to another. Even on weekends & holidays.
- APIs currently available (under the UK open banking government guidelines)
- Pay to mobile phones (not that cool).
- Debit via a Debit Card out of the Mastercard network (costs something like 6p per transaction or something, not sure of the details but there's no fixed fee)
There are also a couple of other things like their fraud systems in how you can unblock your card without having to call customer sevice. Granted its an annoying robocall.
Some customers also have authentication by voice from recordings via customer service calls.
All this is in addition to what everyone else has we take for granted: Pinsentry, NFC, Chip and Pin.
The list is quite long, but I hardly think the UK banks aren't innovators. By any measure they're doing a good job.
Also check out Barclay's accelerator where they lend out their banking license to startups.
> What remains to be seen is whether Mondo will make money in the way a traditional bank does.
If their £1m in debit card spending is anything to go by they already have roughly £15k in the bank from Acq Bank revenue from Mastercard. This is just in alpha in 3 months with 200? users.
This is hardly true. The UK is one of the only countries which has a couple of simple features in banking no other country has:
- Instant, Free transfers, including from one bank to another. Even on weekends & holidays.
- APIs currently available (under the UK open banking government guidelines)
- Pay to mobile phones (not that cool).
- Debit via a Debit Card out of the Mastercard network (costs something like 6p per transaction or something, not sure of the details but there's no fixed fee)
There are also a couple of other things like their fraud systems in how you can unblock your card without having to call customer sevice. Granted its an annoying robocall.
Some customers also have authentication by voice from recordings via customer service calls.
All this is in addition to what everyone else has we take for granted: Pinsentry, NFC, Chip and Pin.
The list is quite long, but I hardly think the UK banks aren't innovators. By any measure they're doing a good job.
Also check out Barclay's accelerator where they lend out their banking license to startups.
> What remains to be seen is whether Mondo will make money in the way a traditional bank does.
If their £1m in debit card spending is anything to go by they already have roughly £15k in the bank from Acq Bank revenue from Mastercard. This is just in alpha in 3 months with 200? users.
> I hardly think the UK banks aren't innovators.
I did not say they were not innovative at all. I said they were slow to innovate. This is being proven by the speed at which fintech startups are unbundling banking services into individual products.
Zopa, Nutmeg, Transferwise could have been built by banks. But they were not.
> Instant, Free transfers, including from one bank to another. Even on weekends & holidays.
- Paypal in 1999?
> APIs currently available (under the UK open banking government guidelines)
Yodlee supplies APIs already.
> they already have roughly £15k in the bank from Acq Bank revenue from Mastercard.
Really? Mondo are currently paying for the prepaid cards, and more to load them through the app. This is probably around 2% ? So 20k cost for this? Maybe I am wrong, but I can't see how else the card gets loaded by a free payment.
You are right, the barclays accelerator is great. And similar incubators and schemes are opening up.
I still think it's pretty clear that innovation is coming from the outside.
I did not say they were not innovative at all. I said they were slow to innovate. This is being proven by the speed at which fintech startups are unbundling banking services into individual products.
Zopa, Nutmeg, Transferwise could have been built by banks. But they were not.
> Instant, Free transfers, including from one bank to another. Even on weekends & holidays.
- Paypal in 1999?
> APIs currently available (under the UK open banking government guidelines)
Yodlee supplies APIs already.
> they already have roughly £15k in the bank from Acq Bank revenue from Mastercard.
Really? Mondo are currently paying for the prepaid cards, and more to load them through the app. This is probably around 2% ? So 20k cost for this? Maybe I am wrong, but I can't see how else the card gets loaded by a free payment.
You are right, the barclays accelerator is great. And similar incubators and schemes are opening up.
I still think it's pretty clear that innovation is coming from the outside.
>- Paypal in 1999?
Whaaa? The paypal-to-paypal part is instant. Getting the money into a US bank account usually is not. It's still the case in the US that there is no easy and reliable way to instantly get money that's in your account to appear in your friend's account. (There are some instant transfer services, but they don't work between any two US bank accounts.)
Whaaa? The paypal-to-paypal part is instant. Getting the money into a US bank account usually is not. It's still the case in the US that there is no easy and reliable way to instantly get money that's in your account to appear in your friend's account. (There are some instant transfer services, but they don't work between any two US bank accounts.)
- Paypal in 1999?
Didn't know they were free in 1999. It doesn't look like banks will start charging for transfers though, it's certainly not free to get customers. It can also be withdrawn as cash immediately as its received ;), even today Paypal takes a bit of time to withdraw outside of the UK.
> Nutmeg
Not easy to do as it has to be a seperate entity. Im working on a startup like Nutmeg. Also the 2008 landscape changes in what Banks want to be makes them avoid this space. Investments are a bit investment bankingey for the ordinary person.
> Transferwise
These eat into their margins, why would they do that? They already have customers willing to pay more. Transferwise can't get everyone as an audience that most banks serve, though it will get some of them.
> Zopa
Banks are apparently participating in these marketplaces. Granted they haven't created any marketplaces, though.
> Yodlee supplies APIs already
The bank's API allows transfers, takes 1 second and doesn't need a username or password. No need for those token things either. Yodlee's big problem is they screen scrape (or use the banking api the bank provides which you can get without paying) and it can take up to 5 mins to do this.
They use OAuth so its like the 'login with facebook' type authentication where the authentication is delegated back to the bank.
Banks do innovate but they're interested in things that improve banking and focusing on that. They're not interested in the old pre 2008 model of banking.
Yeah thinking about the 1.5% fee thing they probably don't have that because its routed through Wirecard (German firm) and they've just put mondo branding on it.
I hardly think the banks are slow. I've lived in Australia, South Africa & Canada. By any measure the UK banks (except a few) are really quick in adapting to change. If ours are slow the ones there are Glacial.
I guess if you look at Fintech in breadth, the big players aren't interested in doing everything, just a handful of small things really well and very profitably. It's a bit harsh to say they're not doing enough faster by judging them against non banking startups.
I guess it seems like alot of these services are unbundling banks but it's just a handful like Transferwise. The 'core' banking features are hard to unbundle. I guess P2P lending is sort of a unbundle in a way but its at a different vertical.
To put it another way I guess: What are UK banks missing that is available elsewhere that would improve banking services (besides customer support), or even more generally?
Didn't know they were free in 1999. It doesn't look like banks will start charging for transfers though, it's certainly not free to get customers. It can also be withdrawn as cash immediately as its received ;), even today Paypal takes a bit of time to withdraw outside of the UK.
> Nutmeg
Not easy to do as it has to be a seperate entity. Im working on a startup like Nutmeg. Also the 2008 landscape changes in what Banks want to be makes them avoid this space. Investments are a bit investment bankingey for the ordinary person.
> Transferwise
These eat into their margins, why would they do that? They already have customers willing to pay more. Transferwise can't get everyone as an audience that most banks serve, though it will get some of them.
> Zopa
Banks are apparently participating in these marketplaces. Granted they haven't created any marketplaces, though.
> Yodlee supplies APIs already
The bank's API allows transfers, takes 1 second and doesn't need a username or password. No need for those token things either. Yodlee's big problem is they screen scrape (or use the banking api the bank provides which you can get without paying) and it can take up to 5 mins to do this.
They use OAuth so its like the 'login with facebook' type authentication where the authentication is delegated back to the bank.
Banks do innovate but they're interested in things that improve banking and focusing on that. They're not interested in the old pre 2008 model of banking.
Yeah thinking about the 1.5% fee thing they probably don't have that because its routed through Wirecard (German firm) and they've just put mondo branding on it.
I hardly think the banks are slow. I've lived in Australia, South Africa & Canada. By any measure the UK banks (except a few) are really quick in adapting to change. If ours are slow the ones there are Glacial.
I guess if you look at Fintech in breadth, the big players aren't interested in doing everything, just a handful of small things really well and very profitably. It's a bit harsh to say they're not doing enough faster by judging them against non banking startups.
I guess it seems like alot of these services are unbundling banks but it's just a handful like Transferwise. The 'core' banking features are hard to unbundle. I guess P2P lending is sort of a unbundle in a way but its at a different vertical.
To put it another way I guess: What are UK banks missing that is available elsewhere that would improve banking services (besides customer support), or even more generally?
So, I am always surprised by these apps. How do they (or Simple) go and convince Citibank or Bank of America to give them their data? What competitiive pressures would make BoA modernize their UI?
They're not - they're convincing Royal Bank of Scotland or Barclays customers to switch to their bank because it has a better UX.
Mondo is in the process of registering as a bank.
Mondo is in the process of registering as a bank.
They don't. Simple pays Bancorp Bank for the ability to use its APIs. Customer accounts are actually held at Bancorp, not Citi or BofA.
Also, the name on the sample card if you sign up is "Jimmy Fontana".
This guy, famous for singing "Il Mondo": https://www.youtube.com/watch?v=0SGE8H4R9XA
This guy, famous for singing "Il Mondo": https://www.youtube.com/watch?v=0SGE8H4R9XA
Better software can only get you so far in banking. At the end of the day, they need to borrow and loan profitability and provide services at a low cost. In addition, they need customers, which are not easy to acquire for a new bank. Not having physical branches is definitely a cost saver; however, I’ve seen some surveys that indicate people still want access to some sort of physical branch.
According to their previous Techcrunch article [0], they are writing their own full-stack banking software. Writing your own banking core, external facing software, and internal process software is a massive undertaking, especially dealing with all the regulation and certification processes with third parties. You then become not only a bank but a specialized software development shop as well. Something traditionally only the big banks can afford. I’m not sure, given they are a bank and software business, that their cost base is 1% or 2% of a traditional bank, as stated in their article [0].
I hope they build something awesome but I think to do something of this size will take more than a few million.
Disclaimer: I write banking software.
[0] http://techcrunch.com/2015/06/30/mondo-gets-passionate/
According to their previous Techcrunch article [0], they are writing their own full-stack banking software. Writing your own banking core, external facing software, and internal process software is a massive undertaking, especially dealing with all the regulation and certification processes with third parties. You then become not only a bank but a specialized software development shop as well. Something traditionally only the big banks can afford. I’m not sure, given they are a bank and software business, that their cost base is 1% or 2% of a traditional bank, as stated in their article [0].
I hope they build something awesome but I think to do something of this size will take more than a few million.
Disclaimer: I write banking software.
[0] http://techcrunch.com/2015/06/30/mondo-gets-passionate/
One thing that's quite nice about what they're doing, and rather profitable is the OD system.
With a credit card you have a seperate account, so when you get cash it doesn't have to pay off the card.
With mondo it is a debit card with a current account which can overdraft and interest rates near a credit card (19.9% according to their papers)
This means there's less risk for them and a smaller chance of NPLs as money needs to be paid off to the OD before the account is positive.
While a normal bank can take this view in the aggregate term of a customer's account it encourages the user to engage in more risk taking where the customer can't pay it back.
So you get less risk and the same interest rate.
That being said they do save a lot on software building it in house contrary to hiring someone external to do it for them. If Oracle's standard margin are any indication there's a lot lost this way in terms of cost.
With a credit card you have a seperate account, so when you get cash it doesn't have to pay off the card.
With mondo it is a debit card with a current account which can overdraft and interest rates near a credit card (19.9% according to their papers)
This means there's less risk for them and a smaller chance of NPLs as money needs to be paid off to the OD before the account is positive.
While a normal bank can take this view in the aggregate term of a customer's account it encourages the user to engage in more risk taking where the customer can't pay it back.
So you get less risk and the same interest rate.
That being said they do save a lot on software building it in house contrary to hiring someone external to do it for them. If Oracle's standard margin are any indication there's a lot lost this way in terms of cost.
> With mondo it is a debit card with a current account which can overdraft and interest rates near a credit card (19.9% according to their papers)
What's the advantage here? With my Smile account I have a Visa debit card linked to my current account, with an agreed interest free overdraft for a certain amount and then an additional overdraft on which I pay interest.
Why would I switch to Mondo?
What's the advantage here? With my Smile account I have a Visa debit card linked to my current account, with an agreed interest free overdraft for a certain amount and then an additional overdraft on which I pay interest.
Why would I switch to Mondo?
1) No fees using the card abroad. Exchange rate 'at cost'.
2) No fees using any ATM to withdraw cash (AKAIK when I asked the Mondo guys)
3) Instant notifications when you make a purchase and the ability to switch on and switch off the card. So you're never blocked when you purchase Christmas presents and weirdly spend more one week.
4) They have a nicer app that helps you track how you're spending and your habits are changing. They've even managed to put in logos for each merchant. I know that's hard because I've done it for my startup -(for example a mom and pop pharmacy)
5) Easy integration into transferwise and other apps where you can get loans from banks in a marketplace so you get the best deal. In general there's a whole lot of benefits to the APIification mondo offers. It avoids doing what everyone does by just sending you off and integrating with others who do something better.. Credit Cards? Loans? FX transfers. While I don't know the details this is what I got from their marketplace vision.
6) Sign up using something like Jumio, or Jumio? (Not sure i don't have Mondo, wish I did- so if you're reading this give it to me!) so it takes 30 seconds and no need to visit a branch.
Ultimately its your choice but they have a pretty cool thing they're building.
I might want to point out I have nothing to do with Mondo. I love their idea but the way you asked that question suggests I may be implying that, but I don't have anything to do with them.
2) No fees using any ATM to withdraw cash (AKAIK when I asked the Mondo guys)
3) Instant notifications when you make a purchase and the ability to switch on and switch off the card. So you're never blocked when you purchase Christmas presents and weirdly spend more one week.
4) They have a nicer app that helps you track how you're spending and your habits are changing. They've even managed to put in logos for each merchant. I know that's hard because I've done it for my startup -(for example a mom and pop pharmacy)
5) Easy integration into transferwise and other apps where you can get loans from banks in a marketplace so you get the best deal. In general there's a whole lot of benefits to the APIification mondo offers. It avoids doing what everyone does by just sending you off and integrating with others who do something better.. Credit Cards? Loans? FX transfers. While I don't know the details this is what I got from their marketplace vision.
6) Sign up using something like Jumio, or Jumio? (Not sure i don't have Mondo, wish I did- so if you're reading this give it to me!) so it takes 30 seconds and no need to visit a branch.
Ultimately its your choice but they have a pretty cool thing they're building.
I might want to point out I have nothing to do with Mondo. I love their idea but the way you asked that question suggests I may be implying that, but I don't have anything to do with them.
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Yeah. The majority of the people are normals. Just as they wouldn't trust a quantum random number generator to replace the spinning ball contraption for lottery drawings, they would not trust a 'branchless bank'.
There is something affirming about a tangible building especially when it comes to money. And that's why bitcoin will never replace shiny transition metal.
There is something affirming about a tangible building especially when it comes to money. And that's why bitcoin will never replace shiny transition metal.
"Branchless banks" are nothing new. In Germany we call them "direct banks" (https://en.wikipedia.org/wiki/Direct_bank) and in 2012 they already had 15.8 million customers which is around 20% of the population. And the number of customers has only been growing since then. Most people who are only using online banking and ATMs anyway don't really have a need for branches anymore.