always excellent for the consumer, and it’s forcing the incumbents to change their strategies

welcome, “not a big surprise” for Koppel and Monese. “We set out to serve a specific segment, and made sure that it didn’t mean we gave them a worse or more expensive experience than they would have got from a regular bank. What we have built is a premium product with an incredibly low cost.” A Monese account is roughly five times cheaper than a mainstream current account. Although prospective customers might have another bank account somewhere else in the world, Monese is happy to become their primary account in a new country. This, in turn, eliminates the main hurdle most challengers come up against – Monese is, by its nature, usually a primary account at the first time of asking. “It’s very difficult for other players in the space to make the switch,” states Koppel. “They’re usually seen as secondary accounts, or cool gadgets. There is a lot of competition when trying to transition from that to become primary.”

That’s not to say that the other challengers aren’t doing their part. “They’re all doing an amazing job,” stresses the Monese CEO. “More choice is always excellent for the consumer, and it’s forcing the incumbents to change their strategies.” It’s an exciting time to be alive, he adds, and eventually most will be turning a profit. Yet, it might be difficult to get into the black when you’re considered only as a secondary account by users. “You really have to provide value in order to monetise your model. Once you’re obtaining primary customers you can offer so much more to them and the value to the consumer rises substantially.”

Consistently, successful challengers and digital players from Europe have looked to America for expansion. Yet Monese, once again, is taking a different approach. “Whenever we look at new territories we always ask the question ‘who is our

More choice is

customer’,” says Koppel. The audience for Monese is inherently different than other challengers, and so it looks at countries with significant migrant populations that don’t have an easy access to financial services.

“When it comes to the US, I believe most challengers are looking to disrupt the market and target millennials again,” says Koppel. “If we were to go to the US – which I’m not ruling out – we would still focus on a different audience.”

First things first

Watching the challenger space, it appears that many operate on a feast-or-famine basis, where long periods of slow growth can be suddenly blown away by funding rounds in the millions, along with the exposure that comes with it. When it comes to Monese, says Koppel, the growth has always been pretty fast, but he sees it as a marathon, not a sprint.

“We are on a long-term journey here,” he says. “We aim to have millions of customers within the next few years. Our users are moving over $2 billion on an annual basis through the app.”

Instead of focusing on accelerated growth, Monese’s drive towards primary-first users has meant that it offers “multiplied value” to users. Koppel points to the fact that the app can be used in 10 languages, and that users can pick up the phone and talk to support agents

from across Europe in their own language. “We focus on having as deep a relationship with our customers as possible,” says Koppel. “Ultimately it means providing a deeper product that users want.” | © IBS Intelligence 2018

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