BPP Business School

Coursework Cover Sheet

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Module Name Leading Through Digital Disruption

Student Reference Number BP0293870
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Assessment Title Banking & Financial services (Monzo Bank )

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 Table of Contents
1. Introduction ............................................................................................................................................ 3
2. Task 1 Case for change analysis about Monzo ........................................................................................ 3
Background of Monzo ............................................................................................................................ 3
Types of Monzo...................................................................................................................................... 3
Range of Product and services :............................................................................................................. 4
Customer statistics:................................................................................................................................ 4
Evalution of technical oppertunities .......................................................................................................... 4
Digital change objective to improve customer satisfaction ....................................................................... 5
Simplified processes .................................................................................................................................. 5
Revenue ..................................................................................................................................................... 6
3. Task-2 Gain digital Agility ........................................................................................................................ 6
Techniques for Detecting changes and competitor insights : Digital business agility model .................... 6
Hyper-awarness ..................................................................................................................................... 7
Informed decision making ..................................................................................................................... 7
Fast executions....................................................................................................................................... 7
Innovative technologies ............................................................................................................................. 7
Machine Learning and AI Integration: ................................................................................................... 7
Blockchain and Decentralized Finance : ................................................................................................ 8
Partnerships and Open Banking APIs:.................................................................................................... 8
4. Conclusion ............................................................................................................................................... 8
5. References............................................................................................................................................... 9
1. Introduction
In the global economy, the banking and financial services sector is crucial. Financial
intermediaries power growth and innovation by enabling the transfer of funds from
individuals or organizations with excess capital to those in need of it. This process
funds new ideas, creates jobs, and builds infrastructure. People typically borrow
more money in their early years to pay for things like college and homes, but they
invest more money in their later years to accumulate wealth and save for
retirement. The service provided by financial intermediaries allows people or
businesses to borrow or save money. (Mcnulty , 2017)

2. Task 1 Case for change analysis about Monzo

Background of Monzo
Tom Blomfield, Jonas Huckestein, Jason Bates, Paul Rippon, and Gary Dolman founded
Monzo Bank in 2015 under the moniker "Mondo Bank." They were all Starling Bank
coworkers when they first met. Later, after a
legal fight with an unidentified corporation in
2016, the company changed its name to
"Monzo." The legal name was "Monzo Bank
Ltd." when it was registered at Companies
House in 2016.It's safe to assume that the
company has had significant growth. Thanks to
the investment site Crowd cube, they raised £1
million in 96 days, making it the fastest-ever
crowdfund campaign as of February 2016. (source : PYMNTS , 2022 )

Passion Capital helped the company raise £4.8 million in October 2016, demonstrating the
continued growth of capital income. An additional £2.5 million round. They demonstrated in
2017 that they were a firm with strong growth prospects rather than a one-hit wonder by
continuing their newfound success. The company's valuation reached £280 million in
November 2017 following a series of fundraising events supported by Thrive Capital, Passion
Capital, Orange Digital Ventures, and Goodwater Capital.The company's net worth increased
to £1 billion in 2018 when they began to attract private investors from a variety of
backgrounds and platforms. Following an amazing £2 billion Series F fundraising, Monzo
doubled its value by 2019. (inclusivemoney.com, n.d)

Types of Monzo

Monzo current Account:

Standard functions for daily banking are available with the original Monzo current
account.
o Instant alerts for transactions are among the main features.
 o classifying expenditures in order to monitor costs.
o Bill handling that is seamless.
o no cost bank transfers to the UK. (source:brokerchooser.com)
)
In less than 15 minutes, use your smartphone to apply for a Monzo
current account.(monzo,n.d)

Monzo plus :
An enhanced version of the current account, Monzo Plus comes with
further benefits:
o Every 30 days, get up to £400 free.
o Interest accrued on sums held in a personal instant savings
account. (monzo,n.d) (source-monzo.com)

Monzo Premium:
For individuals looking for premium benefits, Monzo Premium offers
unique features like phone and trip insurance in addition to other benefits.
o A unique Monzo Premium debit card.
o highest priority for customer service.
(source-monzo.com)
Monzo also offers choices for business accounts, accounts for 16–17-
year-olds, and joint accounts. (monzo,n.d)

Range of Product and services :

Monzo Bank Ltd. offers services and products for both commercial and retail banking.
Current accounts, business current accounts, joint accounts, overdrafts, payment cards,
savings accounts, and consumer loans are just a few of the products that Monzo Bank
Ltd. provides. Natural individuals and commercial entities can access Monzo Bank Ltd.'s
offerings.(monzo,2023)

Customer statistics:
7.5 million people, or 14% of adult UK population, had
accounts with Monzo as of May 2023. From February 2022,
when it had 5.8 million customers, the number of customers
has increased by 28%. Since 2017, Monzo has had a mere
240,000 customers. Monzo is the seventh-largest bank in the
UK based on the number of its clients. In 2022 and 2023,
Monzo attracted 1.5 million new users for personal accounts,
and an additional 100,000 joined to access business
accounts.
(barton,2020)
(source-signhouse)

Evalution of technical oppertunities

A winning combination of cutting-edge technology and clever marketing has allowed
Monzo, the digital bank that has been making headlines in the UK, to succeed.
Monzo has to keep taking advantage of these chances if it wants to stay competitive
in the industry.

Increasing Marketing Intent:

­ Adding more than 100,000 new users a month, Monzo has an amazing pace of
customer acquisition. This increase can be sustained by growing its marketing
staff even further.(fleming,2018)
­ Monzo expands into new markets by utilizing its distinctive features, which
include free ATM withdrawals overseas, integration with Amazon Alexa, and
international money transfers through TransferWise. (talkwalker ,2020)

Constant Innovation:
­ Putting money into hiring skilled mobile engineers guarantees a stable and
intuitive app experience.
­ The functions of technical programme managers can promote effective cross-
functional cooperation and technical project execution.(Farrell,2020)

Digital change objective to improve customer satisfaction

­ Monzo stood for transparency, consumer trust and community
engagement. By following these principles, they earned 5 stars for
customer service and achieved an impressive 83% overall
satisfaction in 2021. (Scale Up Collective - Go-to-market for challenger
brands.n.d.)
­ Monzo simplifies processes for its users. For example, when
customers switch to Monzo, the bank handles this process for them.
(marous et al ., 2018)
­ Monzo not only offers great products; it also offers excellent
customer service. By effectively helping customers and making their
lives easier, Monzo has become a prominent player in the
competitive world of banking. Monzo keeps customers informed
about what they require in today's era. This provides transparency.
Customers want to know what's going on and what steps are being
taken to resolve the issue. It would be very easy for the Monzo
support team to just sit back and wait until they get an inquiry from
(source-monzocommunity)
a customer asking what the problem is - but instead of leaving
customers in the dark, they should just go ahead and tell them right
now. ( Creswick,2019)

Simplified processes
Account opening: It's simple to open an account with Monzo. Instead of using
paper registration forms or going to branches, users can register straight through
the Monzo app.
 Instant Notifications: Users may easily track their spending with Monzo's real-
time event notifications. Users receive quick alerts for card payments, direct
debits, and ATM withdrawals.
Budgeting and Categorization: By automatically classifying transactions, the
Monzo app lets users know where their money is going. Budgeting tools assist
users in establishing and adhering to spending limitations.
Easy currency conversion: Monzo users don't have to worry about unanticipated
fees while using their card overseas. For international transactions, Monzo does
not impose additional fees and provides reasonable currency rates.

Revenue
Monzo is expected to produce a remarkable £270 million in revenue annually by
2022. The equivalent of a full year is calculated by multiplying the monthly revenue
by 12. This achievement is a result of their dedication to offering outstanding
customer service and streamlining the banking process.
Moreover, Monzo Flex introduced a function that lets users defer payment of some
bills. Suitable for Monzo clients over the age of 18, this credit facility has an average
annual percentage rate of 19%.( monzo ,2022 )

3. Task-2 Gain digital Agility

It’s generally said that the capacity to successfully negotiate the digital
environment, defeat competitors, and survive in a constantly changing business
environment. ( Risch ,2022)

Techniques for Detecting changes and competitor insights : Digital business agility
model

Source: Digital Business Model by the Global Centre for Digital Business Transformation, 2021
Hyper-awarness
An essential component of risk management is keeping up with technological
advances. still, the notion that effective risk management impedes advancement is
frequently untrue. They actually discover that regular impairs adjustments might
lower risk and increase safety. They support Monzo teams with defined procedures
for significant technological upgrades, acting as trusted advisors. Monzo evaluated
the risks associated with payments, compliance, and legal ramifications, for instance,
before directly participating in the Bacs scheme. Following a successful move,
Monzo is currently securely processing billions of pounds.(monzo,2023)

Informed decision making

Monzo's decision-making process has become less open, which has left the
community with a sense of ignorance.
Monzo experienced financial hardships during the Covid-19 pandemic. Employee
health must always come first, yet some choices have created doubts:
­ It makes sense that the holiday-themed edition of Monzo Plus was not
released.
­ On the other hand, it seems illogical to withhold the budgeting version at a
time when people are struggling financially and Monzo's revenue is under
pressure.
­ With readily available customer service, Monzo ought to be a customer's
lifeline in times of need. (monzo community ,2020 )

Fast executions
Monzo's data stack is an assembly of quickly developing technology that serves as
analytics' basis. Some guiding ideas for their decisions are:
Managed Data Centralization: By managing data centrally, Montago strives to
provide a 360-degree perspective of its clients and business. This methodology
enables data-driven decision-making and enhances organizational efficacy.
Decentralized Value Creation: The data team at Monzo is integrated throughout the
whole business.Teams that are closest to particular problem domains produce their
data products. (monzo ,n.d)

Innovative technologies

Machine Learning and AI Integration:

By utilizing machine learning techniques, Monzo may further improve its user
experience. These algorithms are capable of providing tailored financial advise,
analyzing transaction data, and forecasting user behavior. Take this example:
­ Use AI models to protect consumer accounts by quickly
identifying fraudulent activity.
­ Utilize machine learning to give individuals personalized
spending insights that will enable them to successfully
manage their money.
 ­ AI-driven chatbots that respond immediately to common questions can
improve customer service.(conrad,2019)

Blockchain and Decentralized Finance :

Monzo can investigate blockchain technology to optimize workflows, boost security, and
augment transparency. This is how to do it:
­ By automating financial agreements, smart contracts cut down on administrative
work.
­ Use blockchain to facilitate cheaper, quicker international transactions.
­ Provide supplementary services like loan, yield farming, and stablecoin savings
by working with decentralized finance platforms.
­ Monzo may investigate incorporating well-known cryptocurrencies such as
Ethereum or Bitcoin into their platform. Users would be able to manage both
their crypto and fiat currency holdings thanks to this. (monzo,n.d)

Partnerships and Open Banking APIs:

­ Monzo should keep up its support of the open banking principles. They are able
to provide more services by working together with other fintech businesses and
exchanging data via APIs.
­ Monzo can expand its offerings without having to develop everything from
scratch by partnering with other suppliers (such as credit scoring systems,
investing platforms, or budgeting apps). (Dinçkol, , Zachariadis, Ozcan,2018 )

4. Conclusion
In conclusion, the success story of Monzo highlights the revolutionary potential
of digital disruption in the banking industry. Monzo has become a leader in the
sector by utilising state-of-the-art technology, putting the needs of its customers
first, and remaining flexible in the face of shifting conditions. Businesses
navigating the digital landscape may learn a lot from its creative features, fast
growth, and dedication to openness. The path of Monzo underscores the
significance of adopting digital transformation to maintain competitiveness and
satisfy customers' changing expectations in an increasingly digital world.

(source-networtking)
References

• McNulty, C. (2017). INDUSTRY GUIDE: An Introduction to Banking & Financial Services. [online]
Intern(al) Affairs: The CI Blog. Available at: https://blog.city-internships.com/industry-guide-banking-
financial-services/.
• inclusivemoney.com. (n.d.). What is Monzo, the banking app that conquered the U.K. [online]
Available at: https://inclusivemoney.com/fintech/monzo-bank.
• PYMNTS (2022). UK Competition Watchdog Issues Second Warning to Monzo Over Breach of Retail
Banking Regulations. [online] www.pymnts.com. Available at:
https://www.pymnts.com/news/regulation/2022/united-kingdom-competition-watchdog-issues-
second-warning-monzo-breach-retail-banking-regulations/.
• Monzo. (n.d.). A side by side comparison of Monzo Premium and Monzo Plus. [online] Available at:
https://monzo.com/blog/2020/10/20/comparing-monzo-premium-and-monzo-plus.
• Monzo (2023). Banking made easy. [online] Monzo.com. Available at: https://monzo.com/.
• Monzo Community. (2017). Number of Monzo Users. [online] Available at:
https://community.monzo.com/t/number-of-monzo-users/4196/117?u=alexs [Accessed 4 Feb. 2024].
• Barton, C. (2020). Monzo is one of Britain’s biggest start-ups to date. [online] Finder UK. Available at:
https://www.finder.com/uk/monzo-statistics.
• Fleming, M. (2018). How Monzo has used marketing and innovation to disrupt banking. [online]
Marketing Week. Available at: https://www.marketingweek.com/monzo-marketing-innovation-
disrupt-banking/.
• Talkwalker (2020). How Monzo’s marketing strategy set it on the path to success. [online] Talkwalker.
Available at: https://www.talkwalker.com/blog/how-monzos-marketing-strategy-set-it-on-the-path-
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• Farrell, C. (2020). Monzo: A digital offering that has traditional UK banks scrambling. [online] Digital
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digit/submission/monzo-a-digital-offering-that-has-traditional-uk-banks-scrambling/.
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an-excellent-customer-experience.
• Monzo (2022). Annual Report 2022 | Monzo. [online] monzo.com. Available at:
https://monzo.com/annual-report/2022/.
• Risch, P. (2022). What is digital agility and what does it mean for your organization. [online] Scalable
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https://monzo.com/blog/2023/05/04/how-we-manage-technology-risk-at-monzo.
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https://tbtech.co/innovativetech/artificial-intelligence/monzo-how-the-bank-of-the-future-uses-ai/.
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https://monzo.com/blog/2021/10/14/an-introduction-to-monzos-data-stack.
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• Dinçkol, D., Zachariadis, M. and Ozcan, P. (2018). Monzo, Revolut and other challenger banks are
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