Feb. 11, 2019
Monzo, a London-based digital bank, plans to test a limited number of business accounts as part of a wider strategy to expand beyond its base of mobile-based personal account customers.
Monzo will limit the test to a trial group of 100 sole traders and limited companies, and has also set up a waiting list, according to a blog postfrom Jordan Shwide, an operations analyst at the company.
"We're taking our very first steps towards business accounts with a small test for 100 businesses," the company said in a post that Monzo CEO Tom Blomfield retweeted.
Blomfield last month asked customers via Twitter to share the one thing they wanted that would make Monzo more valuable in 2019. The overwhelming response was to offer accounts for small and medium sized businesses.
The company spent the past month talking to business owners and communicating with customers over the bank's community forum. The feedback was that it is too difficult to open account and that traditional fees for business customers were too hard to understand, according to the blog post.
The business account holders will be able to pay others and get paid more quickly, manage funds and keep track of budgets and expenses, according to the blog post.
Monzo applied for funds in the Alternative Remedies Package, which consisted $900 million set aside by Royal Bank of Scotland that it received from the U.K. government after the global financial crisis. The funds were designed to help smaller banks and fintechs generate additional small business customers to make sure RBS didn’t maintain control over many customers for themselves.
Some of the funds, under a program called the Incentivized Switching Scheme, will allow SME customers to switch from RBS to Monzo, and qualify for a switching bonus in the process. Monzo is still working on its application for its Capability and Innovation Fund, which is also part of the ARP program, which will help it build further small business capabilities.
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Topics: Mobile Banking, Region: EMEA, Regulatory Issues
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