
The bank of the future will be a marketplace - alexbilbie
https://getmondo.co.uk/blog/2016/02/04/marketplace-banking/
======
_lex
Seems like a particularly poor article. The title is an unsubstantiated claim
based on the author's passion project, rather than any sort of real analysis.
Ok, so banks do loss-leaders and cross sell. SO does your supermarket, payroll
provider, and many, many other businesses. Yes, that means that the things
they cross sell will be more expensive because they have to subsidize other
parts of the business - but without that entry point to the customer, they'd
be paying google and all sort of other marketing companies to deliver
customers for each segment of the business - and they'd have to overcharge to
fund that marketing as well.

Or if the argument is that he plans to charge fairly for each bit of the
ecosystem, he's about to learn some hard lessons in strategy.

To the author: I hope everything works out for you - but do some research
first; you're underestimating your competition.

~~~
raesene4
I'm not sure I'd class Mondo as a "passion Project" they're a company with a
product in alpha (payment card) and in the process of getting FCA
accreditation, which requires quite a bit of work to get started on...

As to whether their vision of financial services takes off, I think that
remains to be seen, but it's very interesting to see the large number of new
banks starting up in the UK market which has previously been dominated by a
few large players.

~~~
alexbilbie
Aside from Mondo and Atom Bank who else is there?

~~~
raesene4
There's quite a crop, some of the ones I've seen so far

\- Starling [http://starlingbank.co.uk/](http://starlingbank.co.uk/) \- Tandem
[https://tandem.co.uk/](https://tandem.co.uk/) \- Loot
[https://loot.io/](https://loot.io/) \- Fidor
[https://www.fidorbank.uk/](https://www.fidorbank.uk/) \- Metro (been around a
bit longer but still relatively new)
[https://www.metrobankonline.co.uk/](https://www.metrobankonline.co.uk/) \-
Aldermore [http://www.aldermore.co.uk/](http://www.aldermore.co.uk/)

~~~
iaskwhy
I have been a client of MetroBank since a few years ago and just love it. My
recent experience with Aldermore has also been nice.

Anyone tried any of the others?

~~~
aembleton
I was very happy with MetroBank until I moved away from London; they don't
have a branch in Manchester yet. Also, their debit card now charges for
purchases outside of Europe so they would charge me for AWS purchases.

Now I'm with Halifax; the customer service is no where near as good, but at
least I have a Mastercard with free foreign currency transactions.

~~~
mst
My Halifax branch staff have always been wonderful; fortunately for me, said
branch is five minutes' walk from my office so I can basically go via there
when walking into town to scavenge lunch. Otherwise, yeah, YMMV.

------
dodders
Only, Mondo isn't even a bank, yet. From the FAQ [1], "your money will be held
in a separate, protected account by Wirecard, our issuing bank".

As Matt Levine keeps pointing out [2], "Tech businesses trying to disrupt
finance tend to think that they are solving a technical or data or customer
service problem, but the problems of finance are always and everywhere
regulatory problems."

[1] [https://getmondo.co.uk/faq/](https://getmondo.co.uk/faq/) [2]
[http://www.bloombergview.com/articles/2015-06-19/bitcoin-
buc...](http://www.bloombergview.com/articles/2015-06-19/bitcoin-bucket-shop-
kicks-bucket)

------
bradleyjg
"If you have some money left over at the end of the month, imagine being able
to move it into a P2P lending platform with one click."

The last time people in the UK went looking for better interest rate on their
savings they found online Icelandic banks. They put large sums of money into
them (even local governments!). They apparently didn't consider that there was
a reason these banks were paying higher rates than their local banks. When the
banks went under and the resulting shortfall was greater than the entire GDP
of Iceland, they were furious and demanded their own government "do something
about it". The resulting bailout of speculators ended up costing the Treasury
billions of pounds.

So I don't think the taxpayers of the UK should be all that thrilled by the
brave new world of being able to move money into P2P lending schemes with one
click.

~~~
aembleton
It's not that far off one click already. I can set up Zopa to lend out money,
then just transfer money with `1 click` from my current account.

~~~
notahacker
Agreed, transferring money to lending accounts is pretty easy anyway going by
direct to the P2P provider.

The wider issue here is that high street banks (or "challenger banks"
marketing themselves as equivalent to high street banks) are subject to an
awful lot more scrutiny around how they advise customers to handle their
finances[1]. If your differentiator from other banks is encouraging your
depositors to buy into a wider range of somewhat riskier alternative lending
products outside your own control, then the same people that made a fortune
from arguing consumers were missold PPI and mortgages are lining up to take
shots at you if and when things go wrong...

[1]considering the special privileges they get, that's the way it should be

------
osullivj
"If you have some money left over at the end of the month, imagine being able
to move it into a P2P lending platform with one click. Or being able to choose
a mortgage from any one of a number of providers based on your previous
spending habits and income."

Keep imagining. I've been working on UK mortgage software for the last few
months, and it's stone age. I'm talking interfacing with a Fujitsu VME
mainframe stoneage.

~~~
elorant
Why do you think that's happening? Didn't anyone bother to build something
decent or is the market hostile towards change?

~~~
osullivj
A lot of banks & building societies built mainframe systems to run mortgage
businesses in 70s. They're still running on them, and don't want to bear the
cost of transition. When the housing market is buoyant they transact and make
money, so a system overhaul isn't a priority. And when times are bad, there's
no money for that kind of project. As for the software vendors serving this
sector, that's another story...

~~~
spking
This has been my experience after 7 years on the IT side of the financial
services industry. I worked at one of the top 10 commercial banks in the US
and within the last 3 years they abandoned a multi-year migration project to a
real time infrastructure. Many huge banks still run Tandem systems.

------
blibble
so if Mondo's going to only provide a current account: what are they going to
do with their customer's deposits? just leave them sit as cash doing nothing?

a bank that cross sells will use the revenue from lending to ruthlessly
undercut this newcomer.

banks are big as the size of the balance sheet allows mind boggling economies
of scale.

existing banks are probably also able to hire a team of 10 good app developers
to put together a high quality app, if they thought the demand was there...

~~~
alexbilbie
Someone recently asked on the Mondo Community forums

"If I put my money into Mondo, how will it be invested?"

Hugo Cornejo an employee answered with the following:

"Very good question. During the first year a very small proportion of your
money will be lent to private individuals in the form of unsecured overdrafts.
That’s all the lending we’re doing. The rest sits in cash at the Bank of
England. In future, we will do more personal lending and invest some of the
money in UK government bonds."

Unfortunately the link to this reply is only available to Mondo testers:

[https://community.getmondo.co.uk/t/after-6-weeks-of-
use/337/...](https://community.getmondo.co.uk/t/after-6-weeks-of-use/337/2)

------
sharemywin
I thought it was going to be an article about how p2p lending was going to
take over everything: car loans, mortgages, payday, equipment finance, small
business loans, merchant cash advance, factoring, debt collection, credit
cards, pawn shops.

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ultimatejman
The title is right.

PSD2 / XS2A are forcing the big UK banks to offer APIs. This is good, but will
mean a current account will essentially stay the same, and startups will build
the services around this.

Mondo is already setup perfectly for this and has the early advantage, but
startups build for users, and the users are with the big banks. I expect
challenger banks to challenge, but in 10 years the big banks will have some
incredible integrations which have been gifted to their customers , making
them stay.

------
ArkyBeagle
This is like saying "the battery of the future will be a transistor."

------
inthescript
The only real alternative to a UK bank that has actually launched and actually
works is Monese. 20,000+ app installs in under 4 months since launch and an
active community of users
[http://www.facebook.com/mymonese](http://www.facebook.com/mymonese)
[http://www.twitter.com/mymonese](http://www.twitter.com/mymonese) with plenty
of reviews to read here
[https://play.google.com/store/apps/details?id=com.monese.mon...](https://play.google.com/store/apps/details?id=com.monese.monese.live&hl=en_GB)
Euro accounts will also be landing this year, and transfers to a range of
European currencies are supported at just 0.5% !! Plus the account is
currently free !!!!

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bernardlunn
Free loss leader with upsell describes the Freemium model - what is wrong with
that?

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namenotrequired
He mentions TransferWise and Azimo. Does anyone have experience with Azimo,
maybe to compare to TransferWise?

I'm very happy with the rates and transparency of TransferWise [1], and Azimo
seems to do something similar but it isn't very clear how they work or what
their vague claim of "best rates" means (it's not like they're the only ones
that claim that).

[1] If you want to try it, with an invitation link you get your first transfer
of up to £3000 for free, here's mine:
[https://transferwise.com/u/5d78](https://transferwise.com/u/5d78)

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vegancap
I've been proudly using my Mondo account/card for a week now. So pleased with
it so far. Definitely worth checking out.

~~~
aembleton
What are the advantages of it over a current account from a big bank?

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narutouzumaki
Interesting...

