At last night’s Open Office session inside Monzo HQ, head of partnerships Phil Hewinson laid out his vision for the digital bank’s third-party marketplace, all housed in-app.
It is expected that Monzo will branch out into offering multiple product categories, with energy and insurance first on the agenda. Others mentioned for the near future included investment, mortgage switching and cashback schemes.
Long term, Hewinson hopes that the bank might also explore options related to merchants, such as supporting retailers in providing eating out or fashion experiences through the Monzo marketplace.
It was made abundantly clear that Monzo sees its marketplace as becoming core to its business model – and as its primary revenue driver.
Until recently, Monzo absorbed many of its user costs itself, and as a result has been operating at “as close to zero as to be zero”. This is set to change with the migration of all existing users over to the current account, and new fees for foreign ATM withdrawals.
To break it down, the cost of the pre-paid card is £50 per customer, per year. On the current account, that decreases to £15 per customer per year. As Monzo’s costs come down, Hewinson sees the marketplace as a way to “plug a relatively small gap from a revenue perspective”.
Previously, Monzo laid out its plans for a new service called Pots which would allow users to segregate their money, with the potential for allowing third-party providers to integrate their services into the Monzo interface.
As of today, Hewinson hopes to have a few partners lined up for users to start a Pot with by the end of March 2018, focusing on insurance and investment.
However, creating its own products is not something that Monzo is planning on doing for now, wanting to maintain its neutrality as a marketplace before creating its own offering of savings accounts or mortgage options.
He commented: “My general philosophy is that things will come when it makes sense. We’re trying to build a product experiences in context to Monzo, integrating the products into your Monzo account functionality.”
As to the future, Monzo is thinking global. It was hinted that US and European expansion is on the horizon, but that the business is not yet sustainable enough to support that step.
As competitors N26 and Revolut look to launch in the US in 2018, and with many already offering their own in-app marketplace platforms, it seems Monzo still has some catching up to do.
