Could Monzo’s Internet of Banking project ‘leapfrog’ its marketplace?

The man behind the digital bank’s IFTTT integration talks to AltFi.

Monzo’s IFTTT project is about as futuristic a thing as there is in banking.

Last week, the digital bank partnered with IFTTT (If This Then That) to allow customers to link various digital services to their Monzo account. In doing so, it became the first bank to directly integrate with IFTTT.

Monzo has made a number of ‘applets’, as it calls them, itself (you can view those here). Examples include ‘Get rewarded as you run or cycle with Strava’ and ‘If it rains, take some money out of my Rainy Day pot’. In the former example, customers are ‘rewarded’ with 1p from a savings pot of their choosing for every 10 metres run.

But Monzo’s engineers are not the only people building applets. In an interview with AltFi, Simon Vans-Colina, a senior engineer at the bank, explained that Monzo users can build ‘whatever they want’ using IFTTT.

“The IFTTT integration is in many ways much more powerful than anything we could have built ourselves,” he said.

Vans-Colina is responsible for building Monzo’s Moneybox-copycat service Coin Jar, which lets users round their purchases up to the nearest pound, saving the difference. £1.3m has already been saved through the tool. In fact, it has proven so popular among Monzo’s users that no less than 48 pages of community forum discussion have stemmed from it – with the bulk of that discussion revolving around building similar functions.

“I realised that trying to build all of them wouldn’t actually work,” said Vans-Colina. So he left it to the bank’s customers.

How digital banks choose to link with other digital services is a key topic in the sector – relevant both to the marketplaces that most banks are trying to build and to their Open Banking plans. But Vans-Colina reckons the IFTTT integration could come to ‘leapfrog’ the marketplace model.

He described the marketplace model as a collection of one-to-one connections, curated by a bank.

“The marketplace implies that there’s some sort of commercial advantage to Monzo to putting stuff in that marketplace,” he said. But through IFTTT, Monzo and its users can build a bunch of applets that provide ‘no economic benefit’ to the bank, and that might not be made in the absence of IFTTT.

Vans-Colina also sees the integration as ‘very much in the spirit of what PSD2 is trying to achieve’. For the uninitiated, PSD2 is an EU directive that opens up access to transaction data – hitherto the preserve of established banks. But companies wishing to access that data must be regulated as Account Information Service Providers (AISPs).

When a customer builds or uses an applet on Monzo, that customer may be inviting IFTTT to access its data via a licensed bank (Monzo). IFTTT, however, doesn’t have to be regulated as an AISP, according to Monzo. 

“Our legal team is satisfied that the IFTTT integration is fully compliant with PSD2 and GDPR,” said Vans-Colina, adding that there had been a ‘thorough review’.

He also explained that Monzo is attempting to safeguard its customers data by filtering IFTTT’s access: “The way we’ve built it is that IFTTT can only access the data that’s relevant to an applet that a consumer has created.” 

Monzo itself will not be allowing the IFTTT to make a payment on a user's behalf. Nevertheless, some may feel discomfort at the idea of opening their finances to IFTTT and to all the other tech firms that it’s connected with.

But Vans-Colina says the integration is about providing choice. “We’re not forcing people to use it,” he said. “We’ve done the right thing in terms of doing the due diligence and making sure customers know what they’re signing up to.”

Many Monzo customers have been enthusiastically sharing applets of their own design on Twitter since the integration.

After a week tinkering with the @IFTTT @monzo integration, I now have a real-time dynamically allocated daily budget on my phone home screen! And yeah... only £7 left for today 😅 pic.twitter.com/bOFVCtbBmh

— Olivier Huntington (@_OliHuntington) June 14, 2018

That enthusiasm has been noted. Starling Bank, a competitor to Monzo, seems also to be sizing up a possible IFTTT integration. “At Starling we believe our customers’ bank accounts should integrate with the rest of their lives and that they should have control of their own data,” said Starling's chief information officer John Mountain. 

“We have already onboarded a variety of third party financial services providers in our Marketplace. Our customers can, in addition, automate their accounts using webhooks that we released last month.”

“IFTTT is definitely on our radar.”

Below is a video of Monzo engineers Simon Vans-Colina and Kieran McHugh discussing the IFTTT integration (the sound quality is a little shaky).