There is considerable interest in how the financial services industry will change as it adapts to meet the needs of the millennial generation. We think a good example of what the future may look like is represented by Monzo, a U.K. based cyber bank founded in 2015 by millennials for millennials. Consider the following:
• Monzo is an app-based bank targeted at those whose lives are oriented around their smartphones. It has no browser version of the app nor does it have any brick and mortar branches.
• Monzo has grown rapidly using a peer-to-peer recommendation scheme. There is a waiting list of tens of thousands to get the app. Current users are given a “golden ticket” which they can share with a friend, allowing the friend to skip the line and join immediately. The allure of the “if you know someone, then you’re in” mentality makes people feel they are part of an exclusive community.
• Monzo offers a trendy, bright coral debit card clearly underscoring the differentiation from traditional bank cards and announcing users as part of the Monzo family. The app is convenient, helpful, and user-friendly and includes convenient functions like rounding up charges and saving the differences in targeted savings vehicles. It also allows users to send payments and use other messaging apps to request payments.
• Central to Monzo’s value proposition is the claim from the company that “We’re building Monzo together.” Monzo has created an active community of clients bound together through a social media-based community forum which allows participants to give feedback on services, offer new product ideas, connect with in-person and online community events, and find news about goings-on at the bank.
• Monzo has a manifesto on its website called “Our tone of voice” which outlines how the bank is to communicate with the public and with clients. In general, it stresses transparency, simplicity, accessibility, positivity and client centricity. Technical language that separates employees from regular people is discouraged. Normal words are used in place of more formal terms. Ambiguity is replaced by clarity and an active voice is preferred to a passive, bureaucratic one.
Around simple banking functionality, Monzo has created a committed cyber-community whose members actively engage with each other and the bank to meet their common interests. This model we believe may presage the future of financial services in the millennial world.