14 November 2018 | MOF Team
The self-professed challenger bank of the future, Monzo is a bank Making Money Work for everyone ‘working with you, for you’.
The firm, originally Mondo, was founded in 2015 by a small team standing in opposition to brick-and-mortar banks. In February 2016, Mondo set the record for ‘quickest crowd-funding campaign in history’ when it raised £1m in 96 seconds via the Crowdcube investment platform, before changing names to Monzo in March 2017.
The bank now boasts one million customers swiping the telltale card. With over 360 employees (250 of those employed in the last year), the company could well be worth £1.5 billion after its next round of investment.
Gary Dolman, the CFO of Monzo, was one of the founding members, sticking with the bank through its infrequent lows and rocketing highs. Previously working for ABN AMRO and MizhoInternational, Dolman is at the epicentre of the banking world.
In this month’s ‘A Conversation With...’ segment, Matter Of Form sits down with Gary Dolman to unpick exactly how Monzo has risen to the heights we see it at today. We hear what has shocked him the most, the biggest challenges the industry faces and how “from the depths of despair, hope blossomed”.
Monzo began with “nine people and a group of powerpoint slides”, Dolman explains. With a clear goal in mind (the creation of the best current account in the world), a prepaid card offered a trial product to test features of a banking app. “We ended up topping out at in excess of half a million customers on the prepaid card, so maybe it wasn’t such a bad idea after all.”
The incredible popularity of the Golden Ticket Scheme most surprised Dolman throughout the journey. The scarcity of the tickets projected Monzo as exclusive and exciting. The anticipation surrounding Monzo channeled the innate drive that when you can’t have something, you want it even more. Despite a next-to-nothing marketing budget, the Golden Ticket Scheme massively boosted brand awareness to the extent that tickets were even sold on eBay. Dolman humors, “I suppose I had underestimated that British people were accepting of ‘standing’ in a queue if the product is right...”.
Despite the obvious marketing advantages of the Golden Ticket, the queue was the simple result of the limited capacity of customer operations. Demand had to be regulated to ensure the new bank delivered on the seamless service provision it promised; “If your not careful, once [the cards] get out there, the waiting time to answer a query blows out and then reputational damage sets in”.
Now, Monzo strives to remove all third party providers from company operations. As the firm moves towards a more mainstream image, Dolman hopes Monzo’s full IT stack will improve accountability and service integration.
When asked if there was any point in the journey that Dolman felt things were taking a turn for the worst, he frankly replied, “I don’t think there has been a point where we have gone drastically wrong here - it’s just been a case of correction.”
Monzo’s seamless journey has not been a simple case of luck. Dolman attributes Monzo’s success to the no fear culture of Monzo’s team, who approach problems with the necessary optimism and enthusiasm to find a solution - “ok, we hit problems, so we go around it, over it or through it - ending up with what’s required… and that’s the great thing about working with people under 30 who aren’t daunted by bad experiences in the past.” With 90% of the Monzo team in their twenties, there is a real sense of innovation and excitement - a “don’t fear, go do it” attitude. He defines this as a:
“Five finger push - four of those fingers won’t break through, but the fifth will and it will break through to something big. It’s not being scared to fail in certain aspects.”
That’s not to say Monzo has managed to avoided failure: Dolman refers to a sudden outage where users’ cards and app stopped working. But, Monzo’s transparency to what went wrong galvanised consumer trust in a company that had only just entered the market.
“Because we jumped straight on it and put an immediate message out saying ‘please carry another card out, we’re having an outage and we’re looking into it and will update you immediately’, the PR that came back from it was really strong… From the depths of despair hope blossomed - people said this is a really good firm to be with.”
Given the crumbling of trust in the sector following the 2008 crash, epitomised by secrecy and betrayal, Monzo’s forthright position is especially admirable. When asked the biggest challenge the banking industry now faces, Dolman stressed the blame culture:
“One of the things you are going to deal with is that you will have to be prepared to run a whole load of initiatives and be prepared that some of them will fail… But, the big banks don’t do that, it’s got to be well somebody’s failed, who’s responsible, we better fire them.”
Underpinning Dolman’s approach is the vital importance of team unity. There is a shared responsibility where each employee has a vested interest in “continuing to upgrade and build a delightful product that people want to use.”
In terms of next steps for the bank, Dolman discussed the development of Monzo to be at “the centre of people’s financial dials”. He envisions the software becoming a marketplace, where users are introduced to new exciting products across the sector - however, they are wary that “there is a delicate balance” between offering opportunities and spamming people. For now ‘its focus, focus, focus on [the current account] product and attracting consumer numbers’” whilst “not getting bogged down into creating lots of other products.”
Despite a clear ambition to create the “best current account in the world” with a drive to even better and bigger technology, Monzo ignores the competition.
“You worry about your own game, not what the opposition are doing and let them catch up with you - not the other way round. You are constantly saying ‘these are our ideas; this is what we want to do’, and you have the courage to publish it.”
“What you are banking on is the fact that you are going to be able to do things better and faster than the opposition.”
Of course there will be challenges. Dolman highlights remaining innovative as one, “going from a small company to a big company, maintaining that culture and keeping that violent change going is something that needs constant attention”.
If big companies are to endure the test of digital and embrace the transformative effects of technology on business, all must be in it together. The Monzo model provides values most sectors can learn from; Dolman stressed the centricity of being open to failure, transparency should crises arise and deep-rooted team unity in the face of adversity.
But, what about Monzo now?
“We’re at an inflection point of the company now; we’ve gone from a start up, to small to now medium sized territory… We are fine for this size company but are we ok for the next level?”
Dolman highlights how Monzo, the ‘bank of the future’, will undoubtedly further excite, thrive and challenge the standards of financial services as it cements its position in the banking world.
Given MOF's own interest in the future of banking, we were honoured to speak to Gary Dolman. Monzo showcases the power of a company that is profoundly loyal to its deep-rooted values, customer-centric focus and pursuit of the extraordinary.
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