
Digital upstarts taking on Britain's dominant few banks - edward
https://www.economist.com/news/finance-and-economics/21737028-battle-between-one-side-novelty-technology-and-gusto-and-other
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Chriky
Monzo is really good but I think it's unfair to characterise the high street
banks as dinosaurs that never innovate. They almost all have phone apps that
let you instantly send money to other people, often straight from your
Contacts.

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randomsearch
Disagree. Most of the UK banks are dinosaurs, inhibited by technical debt they
were too scared and/or lazy to pay off.

I’ve used four established UK banks. Monzo is light years ahead.

Simple example: buy round in pub.

Monzo: “£10.50 spent at Red Lion in Shoreditch” immediately pops up. Balance
is reduced.

All other banks I’ve used: <nothing happens for days, as long as a week>.
Showing on app after that: “6-Feb CHG A LO SWIN 3868X £10.50” or similar
garbage. And if that subsequently takes you overdrawn, well, your fault buddy!
Should have tracked every penny you’d spent and run a spreadsheet to make sure
you weren’t going overdrawn. Not our fault you’re too busy to itemise your
spending, even though there’s absolutely no good reason for you to have been
required to do that for decades.

The first time I used Monzo, I topped up from my bank’s debit card and bought
something from the shop. My phone buzzed as I tapped the card reader and it
gave me that magic moment feeling startups are always looking for. Five days
later, the top up from my old bank appeared on my internet banking. After a
minute, I realised what it was, laughed, and closed the old bank account.

~~~
blibble
personally I'd much rather have the bank-account-that-receives-my-salary have
its transactions processed by prehistoric software running on an ultra-
reliable mainframe instead of the latest version of mongodb or cassandra on
AWS

I will however happily sign up, deposit the bare minimum and thank their VCs
for paying the foreign exchange fees for my holiday :)

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thesehands
I use Monzo, I can see what I spent where, and eacd 'where' is part of a
broader category so I can see what is being spent by category. It is the ui
that banking has needed for a long time.

It must be relatively easy to only operate the liabilities side of banking,
its the assets (loans) side I would expect to be the most difficult path to
navigate for new banks.

Nothing on the Monzo roadmap re loans: [https://trello.com/b/9tcaMB4w/monzo-
transparent-product-road...](https://trello.com/b/9tcaMB4w/monzo-transparent-
product-roadmap)

~~~
dijit
I used to work with the head of engineering at Monzo, smart guy.

I know he pushes a lot of their tertiary code open source.

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charleyma
Curious for those that use "upstart" banks, what convinced you to try out and
move funds into that bank account? In the US at least, customer stickiness to
their financial institution is extremely high and personally, the last time I
opened a new bank account and moved out all of my funds was due to how I was
treated as a customer at my old bank.

The other appealing draw for me was also high interest rate, but curious to
hear what are the killer features for a digital bank.

~~~
nickonline
Digital servicing and apps, no need to head into a branch, ever.

~~~
walshemj
MM and you trust an easily losable, stealable, and hackable phone also prone
to catastrophic failure with access to you bank account.

The UK broadsheet weekend financial sections regularly future people who have
lost life changing amounts to fraud and the banks response is to shrug and say
"data protection"

And you think an "app" based bank is going to be better.

~~~
dpwm
I sometimes wonder how much of the UK economy is actually built on this fraud.
The vast majority of these accounts are with UK institutions, it should be
rather trivial to track down. Just the sort code alone tells you the bank and
very often the branch.

I've heard it claimed that often the money gets transferred internationally
from the shell account. Even so, the KYC for anti-money-laundering purposes
should cover who owns the account it first lands in.

The most benign sounding explanation I've heard that sounds plausible is that
privacy is a key selling point for UK financial services (I hear Switzerland
isn't so private any more) and that main parties that investigate organized
fraud (typically City of London police -- distinct from the Metropolitan
police) know where their money's coming from.

Viewed from this perspective, every article on a couple being blatantly
defrauded of their life savings is more like an advert for those international
customers that might want a bank within a country that allows the whole
banking system to take "data protection" to ridiculous levels.

~~~
blibble
very little I would imagine compared to the absolute vast amounts that travel
around the financial system every day

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therealmarv
If you have a business and spending a lot of money on banking take a closer to
the new Fintechs around the globe. If you are e.g. in the EU you are not
forced to have a bank in the same country as your company... you can use any
bank in the EU (and also beyond). It's also advisable to have bank accounts in
different countries. I've seen more than once bank account blocks by state
regulation although no crime was conducted, simply an computer error on tax
authorities side (this can happen any time). Many banks live in the past and
think they can charge a lot because there are no visible alternatives... but
they are wrong in the digital age...

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JofArnold
If you think high street banks are slow and cumbersome and can’t catch up you
are (probably) wrong; I know enough from being a contractor in London to know
they very much are catching up. They are changing every aspect from internal
APIs and tech stack to customer-facing apps and sites. I definitely wouldn’t
bet against them. Monzo has a clear lead but I can’t see that being sustained
long enough to counteract the strength of existing brands once they start to
release their new products.

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cjrp
> ...counteract the strength of existing brands

Hmm, apart from being widely known (thanks to marketing), I'd argue existing
banks don't have a very strong brand. Mention the word Natwest, HSBC or
Santander and most people's first response will be "I hate them, they took
forever to open my account/incorrectly charged me/have closed all their
branches".

~~~
JofArnold
Fair. And especially HSBC who are pretty much universally hated. But I know
that at least a couple of others are making huge improvements. Plus by “brand”
you need to include “trust” (wither or not that’s misguided!)

