Banking doesn’t usually inspire chat-up lines in pubs, or nightclub-style virtual queues of young people looking for a quick way in. But one London-based startup has managed to become quite the conversation starter in London’s pubs and beyond. 

Monzo lives entirely on your phone and is geared toward a generation accustomed to doing everything with that device. Unlike many other apps, there’s no waiting until the next day to see what’s left in your account after a big night out, because the balance updates in real time.  

It’s not the only app-based bank out there, nor the only bank challenging traditional institutions. The actual product isn’t wildly different from what you can get at ordinary banks on the high street. “There’s no rethinking of product, not redefining identity,” said expert in emotional banking and Chief Growth Officer at Temenos’ Marketplace Duena Blomstrom. 

Yet somehow, Monzo has managed to use its distinctive hot coral-coloured card to garner a buzzy, dedicated fanbase who chat to each other on message boards and meet up IRL — which definitely isn’t happening for the old high street banks. And, it’s the startup that’s being lauded as potentially the UK’s answer to American tech behemoths Facebook and Google. 

It once famously crowdfunded a £1 million investment round in 96 seconds, and since its inception in February 2015 it has almost half a million users. All this just with a pre-paid card (current accounts are now being rolled out) and an app. The company reported almost a £7 million loss in it’s last financial year — and while that isn’t entirely unusual in the early years of new ventures, it can be risky for investors. 

Mashable met CEO Tom Blomfield at Monzo’s Shoreditch headquarters on a rainy Wednesday to find out more. The lobby smells like pulled pork from the street food vendor brought in for a twice-weekly employee lunch, and the young coders and designers queue up. 

“From the very early days we wanted to do a couple of things differently. One was involve our community in basically everything,” Blomfield said.

“Second is being really transparent about everything, whether it’s a product road map or around our license application, or plans for the future, or ATM charging. Community and transparency seem to go hand in hand,” he said.

Monzo’s transparency recently came into focus when the company made headlines for taking away a feature that had been there from the beginning — free ATM withdrawals abroad. Some customers were angry and threatened to leave the company over it…

…but other users pointed out that the community had voted for it.

Blomfield seemed to take that as a reminder that there are powerusers, and then there are the casual users, and Monzo can’t just cater to the most engaged. “Even the vote on the ATM fees, you had to register on the community forum, which something like 15,000 people voted, but we have a userbase of half a million now,” he said. The company is looking at ways to bring the community more into the app to remove the barrier of registering on a forum in order to participate.

The fees issue and sporadic outages will put Monzo in the mainstream press but according to Will Beeson, head of operations and innovation at Civilised Bank, Monzo’s continued transparency works in their favour. 

“There’s a level of openness — transparency, openness on how products priced and delivered, and how issues are resolved. With the few outages with the prepaid cards, they’re very quick to put up their hands and accept responsibility,” Beeson said.

While the commitment to transparency underpins everything they do, clever marketing that captures the zeitgeist has really boosted their profile.

“One of greatest challenges for fintech is getting the word out,” Beeson said. “I’ve seen millennials on the Tube — and even more on the Overgound [the main train line in hipster East London] — and it seems like every other person is tapping in and out with a Monzo card,” he said.

“Leveraging social media was really smart. You get the buzz, and other challenger banks playing on that aspect,” said Ghela Boskovich, head of fintech and regtech partnerships at Startupbootcamp.

One idea that generates buzz is the Golden Ticket. Normally there’s a waitlist for Monzo, but users can get a Golden Ticket (yes, inspired by Willy Wonka, according to Blomfield) which they can give to a friend to skip the queue.

This Mashable reporter can confirm that the Golden Ticket become a talking point in offices, at the pub, and online. It’s been a big success for Monzo.

“Something like 45% of our signups in any given week are driven by Golden Tickets,” Blomfield said.

Another feature that makes Monzo different is their fluency in emoji. Like other things at Monzo, it came about organically, but people really liked it so it stuck around.

“The emoji crept into our customer support language. That’s how our customers communicate,” Blomfield said. 

As Blomfield tells it, Monzo co-founder Jonas Huckestein was working on a holiday Sunday afternoon and thought it would be funny to include an emoji on push notifications. So he wrote the code and pushed it out to the 3,000-4,000 users at the time. 

“It was just to sort of amuse people really but it was surprisingly delightful,” Blomfield said.

He spent a few hours going through the Mastercard-supplied list of merchants and matching up the emoji and it has continued from there.

“There are all these little easter eggs. Totally pointless, no economic benefit at all, it’s just sort of lovely. It makes me smile,” he said. There’s no masterlist at Monzo but developers might add custom combinations for places (certainly British pub names are ripe for that kind of thing). 

Not all features are 🔥.  

Blomfield said they had high hopes for the Monzo.me feature — a web link that lets anyone send a Monzo user money. “But it drives maybe a hundred users,” he said. 

As Monzo grows, it’s important to continue to appeal to a wide base of customers, and not just the superfans.

“When we do product feedback sessions, we need to make sure these people are a diverse representation of our customer base, and not just tech nerds in Shoreditch. It’s easy to just grab three dudes with dodgy beards off the street and see what they think,” Blomfield said. 

He also said that the original categories for expenses reflected a very male perspective, and that going forward the categories would be more representative of a diverse set of needs.

While all these features seem pretty cool they haven’t yet resulted in a payoff. But Monzo has jumped into the fray at a good time.

In 2015, the European Union issued its second Payment Services Directive (PSD2) regulations, and the UK Treasury took those and just ran with them. On Jan. 13, 2018, nine big banks in the UK must disclose their data to licensed startups. (Wired has an excellent explainer on the topic, if you are interested in reading more.) 

With that all that sweet, sweet data becoming suddenly available, of course there are questions of privacy and security. Blomfield is very much aware of this and its importance. He said that Monzo won’t share anyone’s data unless they want them to.

“But there might be times when it might be advantageous to do so like for a gas or electric switching site, so you can get a better deal. So we always try to give you that choice, that opt-in, and if you don’t opt in we won’t share your data,” he said. But he said that what happens to your data after it’s shared with another party is basically in their hands.

“It’s easy to just grab three dudes with dodgy beads off the street and see what they think.”

The Monzo machine got in the game early, and it’s in a good position to capitalise on this sea change in banking data. When asked if Monzo has the potential to be a Facebook or a Google, Startupbootcamp’s Boskovich points to the data.

“The user is really engaged with the app. It collects enormous amount of data, like Facebook and Google collect data. Monzo also sees the transaction and can overlay it with behavioural data,” she said. 

“But the regulations under PSD2 and General Data Protection Regulation (GDPR) are still going to apply to Monzo, the same way as it would apply to anyone else,” she said.

So will Monzo and its crowdsourcing superfans get rich off the incoming treasure trove of personal data? Will it get absorbed into a Google or a larger bank? Will customers get tired of chatting about their brightly coloured bank cards and the relevant emoji on their push alerts?

It definitely feels like an exciting time to be in banking (who would’ve thought?) and we’ll see if the future comes up hot coral.