Case spotlight: Monzo, Changing the Face of High Street, Retail Banking

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This case was featured in the September 2022 issue of Connect.

Who - the protagonist

The mobile-banking app Monzo.

What?

Monzo is a mobile-banking app that disrupted the high street financial sector and forced the household names of banking to rewrite their marketing strategies, re-examine their product portfolio, and redefine how they view customers and their role within the bank.

Monzo boasted three million users across the UK and was valued at three billion GBP in 2019, with a Net Promoter Score (a scale used to measure how happy customers are) of +80. In the same year, HSBC was reported to have a Net Promoter Score of just +7. Meanwhile, the national UK average for high street banks sat at +20.

Monzo Current Account

Why?

Monzo was struggling to convince customers to use them as their main bank account, with 70% still using a high street bank as their ‘go to’ account. 

Profit could be found in being the main bank for the user hence Monzo’s push for consumers to go ‘full Monzo’.

Despite a third of Monzo users being aged between 21 and 35, and Millennials viewing technology as an integral part of their life, perhaps the long-held view of money being safer within four walls and the trust reputable banks have built up over the years still held sway.

Where?

Created by Tom Blomfield in the UK for British users, Monzo is headquartered in London with a team of over 1,600 people.

When?

Tom founded Monzo in 2015 at a time when it was one of the earliest of a number of new app-based challenger banks in the UK.

In 2017, Monzo received their banking licence, becoming a ‘proper’ bank, after originally offering a pre-paid card, named Mondo, based on another bank’s licence.

Key quote

“Traditional banking isn’t built for the way we use money as part of our everyday lives…we’ve made it our mission to make money work for everyone.”
Monzo’s motto in 2019 as a bank for everyday use.

What next?

Since gaining their full UK banking licence in 2017, Monzo attracted over 100,000 new customers each month, and dethroned First Direct after a decade at the top of the Which? polls for Britain’s best bank for customer service.

Monzo were taking traditional marketing models and incorporating their love of their customers and flipping the financial sector on its head. Traditional retail banks responded by trying to incorporate some of Monzo’s visions, technology and approaches into their marketing and business strategies to remain competitive.

With the banking sector facing one of the biggest phases in its brand turmoil for a decade, how can Monzo develop its products over the next two years to ensure its business model for the next ten keeps challenging the banking sector?

AUTHOR PERSPECTIVE 

A student-produced case

Máire said: “This case began life as an assignment for an MBA class in Strategic Marketing. We used a case study-based approach in class, including several from The Case Centre. The final assignment for the class was to produce a strategic marketing case study covering some of the issues and theories discussed on the course.  

“The best papers were then worked on for publication. Helen’s (an MBA student of mine at the time) was a standout due to the topical nature of the work, and the depth of research.”

Credible sources

Helen continued: “A personal highlight during the writing process was being able to interview a ‘Monzonaut’ and hear about how the company’s values and passion for ethical lending and leadership is felt by even the staff members that work remotely.  

“The biggest challenge was finding credible sources, whilst Monzo are discussed widely in business media, there were not many academic sources to draw on at the time of writing.”

Using the case in class and exams

Máire added: “I have taught the case twice and one of my colleagues has also used it in a CPA prep class on fintech.

“I have used it as a discussion case study and as part of an open book exam. Students respond very positively to this case as fintech is an area that many are interested in, and this leads to lively discussions. With the open book exam, many students produced excellent analyses in a timed environment too.”

Interest in challenger banks

Máire explained: “This is a really popular case with my students as most use ‘challenger banks’, although Monzo is not active in Ireland, where I am now teaching. We discuss the contrasting approaches and points of differentiation for competitors like Revolut and N26.

“Students are also intrigued by the ethical finance aspect that Monzo promote - the financial market in Ireland is quite different, as over 70% of the population is a member of a Credit Union (co-operative financial institution) compared to around 4% in the UK. This provokes a lot of discussion as to whether a for-profit company can use this as a strategy to break into the market here.”

Lavender Metal Card

Case writing tips

Máire advised: “Pick a subject you find interesting - the passion for the topic will then shine through. It’s also critical to find a hook to tell the story.”

THE CASE 

The case

Who - the protagonist

The mobile-banking app Monzo.

What?

Monzo is a mobile-banking app that disrupted the high street financial sector and forced the household names of banking to rewrite their marketing strategies, re-examine their product portfolio, and redefine how they view customers and their role within the bank.

Monzo boasted three million users across the UK and was valued at three billion GBP in 2019, with a Net Promoter Score (a scale used to measure how happy customers are) of +80. In the same year, HSBC was reported to have a Net Promoter Score of just +7. Meanwhile, the national UK average for high street banks sat at +20.

Monzo Current Account

Why?

Monzo was struggling to convince customers to use them as their main bank account, with 70% still using a high street bank as their ‘go to’ account. 

Profit could be found in being the main bank for the user hence Monzo’s push for consumers to go ‘full Monzo’.

Despite a third of Monzo users being aged between 21 and 35, and Millennials viewing technology as an integral part of their life, perhaps the long-held view of money being safer within four walls and the trust reputable banks have built up over the years still held sway.

Where?

Created by Tom Blomfield in the UK for British users, Monzo is headquartered in London with a team of over 1,600 people.

When?

Tom founded Monzo in 2015 at a time when it was one of the earliest of a number of new app-based challenger banks in the UK.

In 2017, Monzo received their banking licence, becoming a ‘proper’ bank, after originally offering a pre-paid card, named Mondo, based on another bank’s licence.

Key quote

“Traditional banking isn’t built for the way we use money as part of our everyday lives…we’ve made it our mission to make money work for everyone.”
Monzo’s motto in 2019 as a bank for everyday use.

What next?

Since gaining their full UK banking licence in 2017, Monzo attracted over 100,000 new customers each month, and dethroned First Direct after a decade at the top of the Which? polls for Britain’s best bank for customer service.

Monzo were taking traditional marketing models and incorporating their love of their customers and flipping the financial sector on its head. Traditional retail banks responded by trying to incorporate some of Monzo’s visions, technology and approaches into their marketing and business strategies to remain competitive.

With the banking sector facing one of the biggest phases in its brand turmoil for a decade, how can Monzo develop its products over the next two years to ensure its business model for the next ten keeps challenging the banking sector?

AUTHOR PERSPECTIVE 

Author perspective

A student-produced case

Máire said: “This case began life as an assignment for an MBA class in Strategic Marketing. We used a case study-based approach in class, including several from The Case Centre. The final assignment for the class was to produce a strategic marketing case study covering some of the issues and theories discussed on the course.  

“The best papers were then worked on for publication. Helen’s (an MBA student of mine at the time) was a standout due to the topical nature of the work, and the depth of research.”

Credible sources

Helen continued: “A personal highlight during the writing process was being able to interview a ‘Monzonaut’ and hear about how the company’s values and passion for ethical lending and leadership is felt by even the staff members that work remotely.  

“The biggest challenge was finding credible sources, whilst Monzo are discussed widely in business media, there were not many academic sources to draw on at the time of writing.”

Using the case in class and exams

Máire added: “I have taught the case twice and one of my colleagues has also used it in a CPA prep class on fintech.

“I have used it as a discussion case study and as part of an open book exam. Students respond very positively to this case as fintech is an area that many are interested in, and this leads to lively discussions. With the open book exam, many students produced excellent analyses in a timed environment too.”

Interest in challenger banks

Máire explained: “This is a really popular case with my students as most use ‘challenger banks’, although Monzo is not active in Ireland, where I am now teaching. We discuss the contrasting approaches and points of differentiation for competitors like Revolut and N26.

“Students are also intrigued by the ethical finance aspect that Monzo promote - the financial market in Ireland is quite different, as over 70% of the population is a member of a Credit Union (co-operative financial institution) compared to around 4% in the UK. This provokes a lot of discussion as to whether a for-profit company can use this as a strategy to break into the market here.”

Lavender Metal Card

Case writing tips

Máire advised: “Pick a subject you find interesting - the passion for the topic will then shine through. It’s also critical to find a hook to tell the story.”

THE CASE 

Read the case

Educators can login to view a free educator preview copy of this case and its accompanying teaching note.

TEACHING NOTE - Reference no. 522-0029-8
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