
Startup bank Mondo raised £1m crowdfunding in 96 seconds - obeattie
https://getmondo.co.uk/blog/2016/03/03/crowdfunded/
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shawabawa3
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

~~~
xivzgrev
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?

~~~
shawabawa3
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

~~~
forgetsusername
> _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...

~~~
shawabawa3
> 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

~~~
phillc73
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](http://www.smile.co.uk)

[1] [https://number26.eu/](https://number26.eu/)

~~~
hawaiikaos
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.

~~~
notahacker
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)

~~~
neximo4
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'.

------
polishninja
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/](http://techcrunch.com/2015/06/30/mondo-gets-passionate/)

~~~
neximo4
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.

~~~
phillc73
> 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?

~~~
neximo4
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.

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ultimatejman
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](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.

~~~
neximo4
> 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.

~~~
ultimatejman
> 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.

~~~
foldr
>\- 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.)

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trumbitta2
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](https://www.youtube.com/watch?v=0SGE8H4R9XA)

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anthonybsd
Can someone explain to me an appeal of Mondo as opposed to some other
established online banks (like Ally for example) ?

~~~
manuelflara
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.

~~~
nly
Barclays bought out INGs UK operations.

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lowpro
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.

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anc84
Totally not a pre-organised marketing stunt.

~~~
hawaiikaos
So? Good for them for jumping on the opportunity. Heaven forbid a startup try
to make a name for itself...

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krmmalik
I should point out that Mondo isn't the only online only bank there's also
FFREES and Monese that are already functional.

~~~
neximo4
Monese isn't a bank and neither is FFREES (they say so on their website)

>
> [https://register.fca.org.uk/ShPo_firmdetailsPage?id=001b0000...](https://register.fca.org.uk/ShPo_firmdetailsPage?id=001b000000m4IXjAAM)

Mondo will offer banking services (lending via OD)

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rgovind
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?

~~~
cmdkeen
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.

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dmoy
I know precious little about the UK banking system. Is there an equivent to
the US's FDIC or Canada's CDIC?

~~~
akhatri_aus
If you mean deposit safety there is the FSCS which protects account up to £75k
(~$100k)

