The bank is among the best know digital only banks in the UK and legions of fans but does it live up to the hype?
Woke 👌 Easy to use. Packed full of useful features. A simple bank account to use either as a main or satellite account but with a quickly evolving service and positive corporate ethos.
Broke 🙁 The very occasional tech glitch. Some features could be easier to find in the app. The Premium version doesn't quite seem to offer value for money if you're not a Monzo geek. i.e a normal person.
Monzo is popular for a reason. It broadly gets better and better each month with more and more features and services being unveiled regularly, often responding to specific customer demand. Yet, it retains an easy to use and simple feel. Its vibrant community provide much of the ideas for new features allowing a close relationship between the bank and its customers. Transparency is high in communications and the company retains a positive corporate image that is truly as close an antidote to the image of the un-caring, slow to innovate traditional banking sector around.
Hot Coral is the head-turning name given to the distinctive coloured cards that have made digital-only bank Monzo instantly recognisable as one of, if not the UK’s favourite, bank(s). And, in truth, it is one of my favourites too.
In the three years since it launched to customers in prepaid beta mode and two years since it has offered full current accounts, Monzo has converted legions of customers (2 million at the last count) and cemented a reputation for simplicity and good vibes.
High street banks trip over themselves to copy its features and brand identity and investors are desperate to grab a slice of the company whether they are experienced venture capitalists or young crowdfunding enthusiasts.
It seems almost like the bank can’t put a foot wrong. The pressing question for users is whether you trust it enough to make it your main bank account and for anyone not signed up, is it worth the hype?
Monzo no longer sends out every card packed by hand. At its peak, it was sending over 5,000 cards directly from its offices in the heart of the City of London but now a card can be ordered and arrive in the UK incredibly promptly the next working day in a smart blue envelope via a more automated service.
Inside the envelope are handy, clear instructions that paired with its app mean you can get going straight away following an easy link sent to your chosen email address.
The real innovation in this regard is the speed of delivery and access. Most banks still take ‘four to six working day’ (unsurprisingly it is always six), cards needs to signed for or picked up in a branch and the whole package arrives with reams of un-readable terms and conditions that, surprisingly, nobody ever reads.
Monzo can be used as a normal debit card or integrated into Apple Pay. Either way when you pay for something you are sent an instant notification that your payment has gone through. This is a handy and reliable feature and reassuring when unsure if a transaction has gone through. If you're phone does not buzz, no transaction.
The app’s simple interface then gives you an instant record of the transaction including a geo-location, automated categorisation eg 'going out', the opportunity to attach notes and a receipt. A small but incredibly useful feature which seems so obvious that it is surprising that it wasn't ever done before is that transactions are generally recorded by the brand name of the seller rather than its' trading name including a logo which helps with visibility of where you are spending money.
This is extended to grouping together transaction through a few buttons, allowing, for instance, to see how much you have spent at Greggs over a month or other time period...if you're a glutton for punishment.
Borrowing and overdrafts (3.5/5)
Monzo does not yet offer loans to its whole customer base but has for the past year or so offered overdrafts. These are very simple to apply for with near immediate credit decisions. Unusually, charges are flat rather than as a percentage. Its overdraft costs 50p each day that the account is overdrawn, capped at £15.50 a month.
This simplicity will strike an accord with many customers looking for simplicity in short term borrowing but is unsuited to customers going overdrawn by small amounts such as £100 and leaving the debt unpaid for greater lengths of time. For example, this amount over two months could theoretically pay nearly 30 per cent for just two months of borrowing. A very high rate.
Monzo says it has been testing actual loans, among a small group of people, allowing borrowing between £200-£1,000 to pay it back over three, six, nine or 12 months but these are yet to be rolled out to wider users.
The firm is also rumoured to be launching a credit card although this seems a way off.
Going abroad (4/5)
Monzo does not charge any fees for paying by card abroad and uses Mastercard’s exchange rate while Revolut uses the slightly more preferable InterBank rate. You can take out up to £200 cash on a rolling 30-day basis with Monzo. After the first £200, it adds a 3 per cent charge to any money you take out.
It is noticeably a good rate compared to many high street banks who charge extra fees and often at a worse rate.
The geolocation transaction data is particularly useful for going through your transactions after travel.
The marketplace model, a system where other fintechs and banks can offer services to Monzo customers, has been much touted as the future of digital banking. Monzo has been vocal about this and currently offers several integrations. Two are savings 'pots' (more on this in the next section) with Investec and OakNorth bank. Monzo is also soon launching its Monzo Plus service, a premium paid for account starting at £3 per month that will offer other third-party services such as travel insurance.
Monzo has three main integrations with debt tracker Emma, savings app Moneybox and automation app If This Then That (IFTTT). These are through an open API system, a good explainer here if that's your thing, which means you need to download those apps and set up accounts with them. You will then be able to 'see' these integrations in your Monzo app.
The really innovate integration is with IFTTT which allows Monzo users to automate a host of services such as keeping a continually updating spreadsheet of transactions in Google Drive, adding funds to a pot when going for a run, save receipts to Dropbox or log how many coffees you are buying in a month. Another buzzword for this sort of thing is 'The Internet of Things' whose best-known example is Siri/Alexa but few financial services have successfully integrated demonstrating Monzo's enthusiasm for new stuff.
Monzo has a dedicated cash savings feature called Pots which allows you to regularly save towards a goal, name this goal and to even add a picture to it all in the app. Pots can be integrated with an Individual Savings Account (ISA) tax-free wrapper (currently up to £20k per year) with either Investec or OakNorth - two banks that have a 'marketplace' partnership with Monzo. Savings can either be through regular automated payments or through 'rounds ups'.
Round Ups, if you haven't guessed already, allow you to spend say 80p and then 'round up' to £1 thereby harvesting 20p to add to a Pot of cash savings that have next-day access in the most flexible option. Rates are reasonable competitive but you are better off going directly to OakNorth if you want the best rate.
Though the Monzo-Moneybox integration (see above) users can also open a Stocks & Shares ISA although this is technically resulting in having an ISA provided by Moneybox.
Customer Service (5/5)
Like many digital-only apps, Monzo funnels many customers to a Frequently Asked Questions section (actually, very well written, helpful and clear) or to its Whatsapp-style chat where an operator at the other end types responses some which appear to be stock answers but nonetheless helpful. Responses typically, I found were speedy. Also, in the instances where I wanted to pick up with someone else at a later time this proved useful and quick.
Monzo also a phone number to call which can easily be found via Google and after calling several times found this was answered after 3-4mins. The advice was useful but I thought it a smidgeon bit off-brand that I was (lightly) encouraged as to if I was interested in having my salary paid directly in.
Overall Monzo's customer service is very high, especially compared with other banks although I would say MetroBank trumps it for expertise.
The Grab Bag is stuff that doesn’t quite fit anywhere else in our review.
> I would like to see a proper in-house Stocks & Shares ISA option or decent integration with a wealth management platform
> Monzo currently offers a maximum of just £1000 for its overdraft which makes me reluctant to dispense with other bank accounts I have with high street banks that offer more flexibility.
Monzo is a great option for most people as both a core or satellite bank account. It is free, high quality, fun and functional.
The big question is can it convince you to make it the home of your money.
Borrowing and overdrafts (4/5)
Going abroad (4/5)
Customer Service (5/5)
Overall score: 4.5/5