015: Expand and simplify
Some neobanks simplify while adjacent fintechs expand
Welcome to Neobanked, a newsletter focused on the quickly evolving UK digital banking market. I hope to gather enough interesting tidbits and news to share this every two weeks.
For me, Neobanks are digital-only offerings that apply internet economics (i.e. zero marginal costs) to the banking sector. My focus will be on companies such as Monzo, Revolut, and Starling.
Through this newsletter I hope to cover each of these companies as they continue to grow within the UK and beyond. Some of the regular features will include user number growth, new product/feature releases, and links to relevant interviews and analysis.
News this week
Innovate Finance speaks with Curve’s CEO to discuss Wirecard
Curve’s aggregation card used Wirecard’s infrastructure and the recent scandal left users unable to make payments. Curve worked around the clock over a few days to accelerate their planned migration away from Wirecard.
bunq picks five charities for Common Goals
The Common Goals feature, part of bung V3, allows a group of users to save towards a shared goal. Alternatively, the group can donate to a chosen charity and bunq has now included five global charities to simplify this choice for users.
TransferWise secures FCA license for investment activities
The license will allow TransferWise to compete with the likes of Nutmeg and MoneyBox by providing their users with access to savings and investment funds.
New and upcoming feature releases
Starling launches USD account
Starling business users can now hold, send, and receive US dollars for the cost of £5 per month. Payments into the account will have a 0.4% fee. The account provides a US ACH number (account / sort code). Also announced was the full availability of the Business Toolkit, after previously being in beta. The Toolkit provides businesses with invoice tracking, automated expenses, and HMRC integration for £7 per month.
Monzo’s simplifying the account funding experience
Called easy bank transfer, the feature uses Faster Payments and Open Banking to redirect users from Monzo to the relevant third party banking app. Pre-filled transaction details are provided and the user can then approve.
Recent blog posts
So Big They Can’t Fail
Goldman Sachs may be the most influential retail banking provider in the next generation of financial services. And not a single end customer will know about it.
Building Micro-Moments in Financial Services
iOS 14 offers a new, streamlined experience that’s perfectly suited for transactional financial services.
The opportunity for non-banking fintechs (like TransferWise, Plum, and Curve) to build a customer relationship by solving a very specific pain point and leverage that into a wider banking relationship is one of the biggest competitive threats to the larger neobanks. Indirect competition from these fintechs may sneak up on the neobanks and slowly steal use cases, and ultimately users.
Super apps like Revolut’s recent release may be the most sustainable source of competitive advantage, rather than highly focused offerings like Monzo.