• WhiteSight

Monzo | Neo-Bank Strategy Deep Dive

Updated: Nov 9, 2020

Flaunting some snazzy coral cards, with upwards of 4M users & millions in funding, Monzo has been in the limelight since 2015. 💁🏻‍♀️


While its product & geographic expansion strategies do show potential, Monzo has yet to emerge with a positive bottom line. 🧐


💸 Loans & advances make up for less than 10% of its deposit base - a big opportunity missed in terms of earning interest income. However, advances have increased 8x Y-o-Y, a good indicator.


📈 The company reports positive contribution margins of £4 per customer in 2019, but its operating expenses are 4x of net operating income for the current year.


💳 Impact of COVID-19 on interchange income from transactions (leading contributor to revenue) will be severe. In proportion, interest income is 25% lesser than interchange income.


💰 2 new paid products - Monzo Plus & Business Accounts have scope to build sustainable revenue sources, however, lending remains its best bet.




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