Monzo, the $4.5 billion digital challenger bank, has entered the financial investment market with the launch of its new “Investments” feature. This move allows Monzo customers to invest in a selection of funds managed by the asset management giant, BlackRock.
Monzo, known for its innovative banking solutions, is now in competition with established banks like Chase, asset management firms, and fintech startups such as Chip, Moneybox, and Plum. While the bank already offers interest-yielding savings pots, this marks its first venture into the world of investing.
The application process is straightforward, with eligible users joining a waitlist before creating an investment pot. Users can choose from three BlackRock-managed funds: “Careful,” “Balanced,” and “Adventurous,” each offering different risk levels.
Monzo’s CEO, TS Anil, stated that the goal of this feature is to break down barriers that prevent Brits from investing. These barriers include affordability, lack of knowledge, and a lack of personalization. Monzo Investments allows users to start investing with as little as £1.
According to research commissioned by Monzo, 69% of the UK population is unsure where to find an accessible and user-friendly investment product. Meanwhile, 60% of adults express interest in investing if the minimum investment amount is low, and 24% of UK adults who invest admit to making investment decisions without proper knowledge.
The Investments feature will be available in a new section of Monzo’s home screen called “Savings & Investments” and will be rolled out to all eligible customers in the coming weeks. However, customers in financial difficulty, such as those falling behind on debt repayments, won’t have access to this feature.
Monzo, with over 8 million customers in the UK, is expanding its financial services offerings to increase revenue and move closer to full-year profitability. The bank reported its first two months of profitability in 2023, driven by higher lending income due to increased interest rates.
Monzo will charge a flat 0.59% fee on customers’ investments each month, comprising a 0.14% fund fee and a 0.45% platform fee.
Monzo aims to become a comprehensive “financial control center” where customers manage various aspects of their financial lives, distinguishing itself from “super apps” that offer a wide range of services beyond banking.
While Monzo is among the first licensed neobanks in the UK to offer investments, competitors like Starling Bank and Zopa do not yet provide investing features. However, other fintech platforms, including Revolut and Freetrade, already offer stock trading services, and Wise offers investment management.
Regarding the timing of this move, TS Anil emphasized that it aligns with customers’ increasing desire to make informed long-term financial decisions, especially amid cost-of-living challenges.
Gautam Pillai, head of fintech research at Peel Hunt, sees Monzo’s investment feature as a way to enhance customer loyalty and engagement.
Monzo is on the radar of investors as a potential candidate for an initial public offering (IPO) in the future. However, Anil emphasized that an IPO is viewed as a milestone in the company’s journey rather than an immediate goal, with no immediate plans for a public listing.
Photo Source: Google
12th September, 2023
By: Delino Gayweh
Serrari Financial Analyst
Article and News Disclaimer
The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an "as-is" basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.
The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.
The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.
By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.
www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.
Serrari Group 2023
