Are Major Banks Doing Enough to Keep Up with Fintech Start-ups?

“You’re a bit of a geek – you’ll like this” said a friend of mine out at dinner recently. He then presented Monzo (originally Mondo), a new banking app listing all of his recent transactions in a clean and engaging design. He then showed off by paying for his dinner with his Monzo card, at which point a notification immediately popped up on his phone with the details of his transaction, before the receipt had even printed. He can also track exactly where all of his money is going in different categories (shopping, eating out, cash withdrawals etc.) and keep an eye on his Starbucks spending, for example. He’s right, I love it. It’s one of those “why don’t we have this sooner?” moments. So I immediately signed up to the waiting list – 30,000 in the queue (now down to 3,089). Just a few days later Monzo announced that it had been granted its banking licence.

Fast forward to a recent Saturday night in Soho when I was a victim of a cash theft. Someone watched my PIN at a bar, ‘borrowed’ my wallet to take out the maximum £250 cash and then dropped my wallet on the floor of the bar behind me leading me to believe it’d just fallen out of my bag. It wasn’t until I happened to be checking my bank details on my phone two days later that I realised I’d been robbed, and now the bank has refused to return my money (after 14 years with this bank, I’m dumbfounded).

This is infuriating for so many reasons and in hindsight there are several things I could have done to avoid it, such as hiding my PIN better and not using my very trendy but very thief-friendly leather rucksack. But I can’t help but reflect that if I’d been notified by my bank immediately that cash had been withdrawn, I could have called the police there and then and he/she might’ve been caught. At the time I was also disgruntled at not having the option to pay by contactless at a busy bar in London – I’m sure I’m not the first to have my PIN memorised. I look forward to the day when cash points are accessed solely by fingerprint or iris scanners so there’s no doubt as to how someone could possibly memorise a four-digit PIN without being given it…

Monzo is just one Fintech start-up that is challenging the way in which major banks are run. Although most banks offer a mobile app, it’s often just a mobile-friendly version of their online banking offering and not at all intelligent enough to truly assist you in money management. Asking around the Rooster office it seems many of us are still attempting to manage our spending manually without an alternative solution offered by our current banks.

So Tom Blomfield, boss of Monzo is right – major British banks face ruin if they’re not able to catch up with technology.

By Yasmine Triana