Monzo: The app-only bank that’s simplifying the Kiwi OE

There are no physical branches and no paper statements, but UK banking app Monzo has managed to capture a loyal and growing following among New Zealanders living in Britain and struggling to open a traditional bank account. Nicola Kean caught up with Monzo’s Kiwi ‘squad captain’ Fred Morgan to find out what the future of banking looks like. 

If the British OE is a time honoured tradition, so is the difficulty faced by newly-arriving Kiwis trying to open a bank account. For the former Auckland insurance manager Fred Morgan it was no different – until a friend recommended a new app-only bank called Monzo.

“I downloaded it and I couldn’t believe the difference in experience from one to the other,” he says, from Monzo’s hip east London headquarters. “If this is how these people approach this problem and it has this big an impact on just me, there’s something special about this.” He was also, as it happened, searching for a job and almost immediately went onto the Monzo careers page to sign up. He started in frontline customer service, now he runs the team as the “squad captain”.

Monzo was founded in 2015, one of the most prominent of a new wave of banking startups laying down a challenge to the high street. It began as a pre-paid debit card, and through the app users could track their costs in real time and set spending targets. In April last year the company gained its banking licence and then launched current accounts. Last month it introduced overdrafts. Customer numbers are more than half a million and rapidly counting – when new users sign up they may be in a queue of several thousand people.

Morgan says the company was founded on the idea that people were not receiving the level of service they deserved from banks. “There are many many of our customers who have other accounts elsewhere, but they still have their Monzo account and it’s because of the way the app operates, it’s the way that it helps them budget, the way that it helps them manage their finances and the fact that they can get really quick service through the app or by phone and social media that appeals to them.”

Kiwi Fred Morgan has landed at UK banking app Monzo. (Supplied)

As a startup, getting people to trust you with their money is a tall order – and 80% of Monzo’s customer growth comes from referrals or word of mouth. For Morgan’s team, this is based around a high level of transparency and honesty. Customers can get assistance through the app, but if they need to talk to someone there’s no automated menu and no hold music. Morgan has a goal of answering all of the calls every single time, which means not leaving callers waiting until they get frustrated and hang up.

“You hire great people,” he says, “you empower them with tools, as well as information to make really good decisions and you hire people who care about helping customers solve problems. If you do those things well, it works.”

It’s a concept that’s hardwired into the company. It has “tone of voice” guidelines to ensure communication with customers is simple and easy to understand – the terms and conditions of signing up have an accredited reading age of 10, says Monzo’s press officer Beatrice Borbon. Accounts are free, and it’s been funded so far by a mix of crowdfunding and venture capital. Users are given the opportunity to have say in big decisions about Monzo’s services.

In September last year Monzo announced it would need to charge for withdrawing cash from ATMs overseas. “We wanted to ask everybody in order to find a solution that allowed us to cover those boxes,” says Borbon. “It doesn’t make us a profit, it’s not a profit making exercise, it’s just about covering the costs we incur because foreign ATMs charge.” Several options were put to a vote on the Monzo community page, and in January it was announced a 3% charge on overseas withdrawals after a monthly allowance of £200. 

Monzo has traditional bank products, but without the traditional structure. (Supplied)

Forty thousand people viewed the forum page, and 6,000 voted. Borbon says more people engaged than the usual percentage of the user base, but acknowledges in the future there may be better ways of making sure every single user has the opportunity to have their say.

With chief executive Tom Blomfield setting a target of a billion customers, ensuring existing ones are able to have their say is just one of the challenges Monzo faces in the future. For Morgan, the rapidly growing user base means having to scale what he calls Monzo’s “delightful” service. “And in order to do that we’re going to have to have some pretty phenomenal tools, some pretty phenomenal in-app self support stuff,” he says. “And that is the biggest difference between working in customer operations at this organisation and anywhere else I’ve been: that ability to walk across the room and say hey it would be amazing if…  and literally the developer is right there.”

They’re already working on machine learning at the back end of the app to help people find answers quicker themselves. Morgan opens up his app and illustrates this by freezing his account, scrolling to the help page, and showing how “unfreeze my card” appears among the top options. “We want to do more of that to scale up the ability of people to not have to get in touch with us because that’s a pain, as quick as we are,” he says. “If we can avoid it that’s great.”


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The Spinoff’s business section is enabled by our friends at Kiwibank. Kiwibank backs small to medium businesses, social enterprises and Kiwis who innovate to make good things happen.

Check out how Kiwibank can help your business take the next step.

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