‘Executive Summary’

Table of Contents

Monzo bank is also using APIs for their products and services 6

The rationale for changing the Business model, using market/industrial analysis 7

References 13

Over of the company

Since the financial crisis in 2008-09, where the banking sector, in the developed market, suffered a huge loss in terms of Trust and from that time onwards the incremental reforms can be seen majorly. Lower interest rate, a culture where innovation is thriving and demand for a platform such as Google/Facebook-like experience led to the “Technology-driven platform” (Borbon, 2017). This innovation led to the establishment of the technology-driven by a financial institution that was fully based on a customer-centric approach, commonly known as “Neo-Bank” who are transforming the traditional way to banking(Borbon, 2017). Monzo Bank Ltd is a neo bank the company is the UK based this is one of the most leading Bank originals was operated through mobile app and prepaid debit card but due to uplifting of some of the restriction on licensing they were able to start the offer the current account as well. Monzo Bank can be considered as one of the fast-growing banks as in September it was estimated that the bank has around 3 million customers(Ketchell, 2018).

Current Business Model Used by Monzo

Monzo bank is also using APIs for their products and services

The rationale for changing the Business model, using market/industrial analysis

Industry analysis is a marketing tool that is used by the business so that they could understand the competitive dynamic of the business and their industry they are operating in(Market Ripe For Neobank Success, 2019). through this tool, they get to know about the degree of the competition in the industry, future threats, their strength, and their weak areas. They even take into account factors such as technological advancement, the rise of new players in the industry. Through this, they can analyze their threats and weakness and work on them. It is very important to analyze these factors as they can have a direct impact on the performance of the bank and it is also important for surviving the dynamic and overly competitive environment. For the Monzo bank, we will be using a SWOT analysis for understanding its industrial dynamics and accordingly, the rationale for changing the business model will be highlighted:

Monzo SWOT Analysis Table

Despite so many advantages in the business model discussed above they need to change their model as in their current model, many drawbacks can have an impact in the long run(Monzo - A different kind of bank requires a different kind of customer onboarding., 2018). One of the major drawbacks of the current model is that Mono bank provides value service of to their end-users but the services given to them are limited and that is why they are still not considered as a concrete choice(Monzo - A different kind of bank requires a different kind of customer onboarding., 2018), another drawback of the model is there is no physical branch and there are no advisors for proving their expert's advice to the clients(Epiphaniou, 2019), lack of human interaction with the client is the major drawback for the consumers. addition to this issue other issues are also client does not fully rely on the neo banks because of the nature of the business which could be another drawback for the Monzo bank as the major concern for any consumer is that what will happen to their money in case of bankruptcy even though the consumers are provided by the warranties (FGDR), but still this is the main concern for the consumers. Another biggest challenge for the Monzo is risk management as Manzo banks are subjected to same risks as the traditional bank, due to the regulation of policies and the Monzo banks have improved the client's transactions but this is also one of the problems as clients are very sensitive for their payments and the data which the bank collects(Epiphaniou, 2019). The main reason behind the lack of trust is that customers always prefer to keep their money in the banks, where there is a “Physical bank” as digital banks are subjected to a system failure which makes the customer skittish about the bank. The major areas where the Monzo banks lack are:

• Lots of money is spent on the advance of the technology to provide the best service Quality

Recommendation

Value proposition: through expansion in the new countries and alliance with the established bank will help them in providing more better values to the customers.

Customer relationship: Monzo bank is lagging behind when we are talking about customer relationship, which is another reason people do not feel comfortable in putting their money in such bank to overcome this issue they can increase the customer interaction through Question answer forms and they can also conduct live events to increase the interaction between the customer and bank(Panorama of the French neo banks, 2019).

Enhanced Business Model for Monzo

Conclusion

References

Borbon, B., 2017. We’Re Building Monzo Into A Marketplace. [online] Monzo.com. Available at: <https://monzo.com/blog/2017/11/16/monzo-marketplace> [Accessed 27 April 2020].

Epiphaniou, L., 2019. Neobanks : Opportunities And Challenges. [online] Geneva Business News | Actualités: Emploi, RH, économie, entreprises, Genève, Suisse. Available at: <https://www.gbnews.ch/neobanks-opportunities-and-challenges/> [Accessed 27 April 2020].

Monzo.com. 2018. Annual Report And Financial Statements. [online] Available at: <https://monzo.com/static/docs/annual-report-2018.pdf> [Accessed 27 April 2020].

Nielsen.com. 2019. Market Ripe For Neobank Success. [online] Available at: <https://www.nielsen.com/au/en/insights/article/2019/market-ripe-for-neobank-success/> [Accessed 27 April 2020].