Mark Harris

🤦‍♂️. App downloads ≠ monthly active users (#MAU) And: MAUs ≠ transactional accounts with salary mandates / regular income (ie profitable) I think I have 10+ payment / banking apps installed on my phone that I haven’t clicked on this year, let alone this month… https://lnkd.in/dZBEcqws #champion #challenger #neobanks #fintech #payments

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Monzo Bank recently introduced a new location-based fraud prevention feature. It’s a smart move. We’ve seen our financial services customers get tremendous results by using our location intelligence to prevent fraud. But a word of advice to others like Monzo Bank that want to leverage location in this way: To make location intel effective for preventing fraud, here are two critical questions you need to consider: 1️⃣ Can you detect location spoofing? When a new fraud prevention feature comes into play, fraudsters start looking for cracks. With location-based features, location spoofing is the most obvious vulnerability. If you can’t detect location spoofing, your solution is dead in the water. That’s why tamper-resistance is a must. But you also have to think about precision, which leads to the second question: 2️⃣ Is your location data precise enough to avoid false positives? If you’re using an imprecise form of location data like GPS (not even going to mention IP)... You could create a lot of false positives. Imagine a fraudster that lives in an apartment building. If you don’t have apartment-level precision, you might have to block the building’s whole footprint to block one fraudster. That’s a lot of good users that become collateral damage. I’m excited to see more people wake up to the potential of location for fighting fraud 💪 But you have to have an answer for location spoofing. And it has to be the right kind of location data.

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Roland Butler’s lighting talk this week emphasised that the customer’s context not being your context. He told a great story about how the product people inside Just Eat’s shiny office built a complex kebab configurator widget, while their customer on the Shanklin Road in reality offered its hungry diners a choice simply of “big kebab or small kebab?” (And I’m guessing 95% went with big) This really resonated, as by coincidence earlier in the day I was designing a CRM system for a client for whom I’m doing some sales strategy consulting, and I added a field to the account record called “Maslow status”. Let me explain. 10 years ago at eBay a sales trainer (the excellent Barry Hilton) gently noted hat we were swanning round talking to our retailer prospects about delightful customer experiences and their brand’s digital future. As a business making glorious amount of cash, and filled with energetic fresh-faced MBAs, we naturally gravitated to this language of “self actualisation”, right at the top of Maslow’s hierarchy. So we failed to recognise that many of our prospects were much more in survival mode. Our manner sometimes rankled, and we failed to spot when our prospects needed an earthier pitch focused on simple money through the tills. No doubt there are B2B AI firms similarly mis-positioning themselves today as they focus on the future rather than near term commercial impacts. So if you’ve just closed your series B and are sipping latte in Shoreditch designing an app to help people through the cost of living crisis, get out there and spend time with your customer to better understand what their context is really like. Good product people always seek empathy with their customers, and being clear on where you are in the hierarchy and that they might be somewhere different will help you design, market and sell a product that resonates better. And thank you Paul Pechey for putting on these talks, and thanks also to the other great speakers Rachel Booth , Diogo Coutinho and Cecilie Einarson Pérez

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Monzo Bank's FY24 results are in, and they've hit a 𝐦𝐚𝐣𝐨𝐫 𝐢𝐧𝐟𝐥𝐞𝐜𝐭𝐢𝐨𝐧 𝐩𝐨𝐢𝐧𝐭. Diving deep into the numbers reveals three key drivers behind its impressive growth: 1. Customer Expansion 👤 Monzo's customer base grew from 7.4M in FY23 to 9.7M in FY24, including a doubling of business accounts from 200K to 400K. With 46% of new customers acquired through word of mouth, this organic growth highlights strong customer satisfaction and brand loyalty. 2. New Product Innovations 🆕 The launch of products such as tax-free savings ISAs has attracted 1.3M customers. Monzo Flex (a novel credit card/BNPL hybrid), and overdraft facilities offer higher interest rates and greater financial flexibility. A significant 42% rise in card spend—from £33.6B in FY23 to £47.8B in FY24—demonstrates heightened customer engagement and trust, solidifying Monzo as a preferred choice for daily transactions. 3. Enhanced Profitability and Financial Strength 📈 Monzo’s profit before tax hit £15.4M, marking its first full year of profitability. This milestone underscores effective cost management, diversified revenue streams, and scalable operations. With gross revenue surging 2.5x to £880M, Monzo’s successful monetisation strategies and strong market demand are evident. At the same time, customer deposits soared by 88% to £11.2B, reflecting growing customer confidence and reliance on Monzo as a primary banking institution. Future Growth Trajectories: Strategic Focus Areas 🎯 Monzo aims to expand its consumer base to 11M by FY25, leveraging organic growth and innovative marketing strategies. It plans to venture into mortgages and go deeper into business lending, indicating significant headroom for product diversification and revenue enhancement. Moreover, Monzo's strategic entry into Europe, with an Irish HQ, and exploration of the US market, signals an ambitious geographic expansion plan to unlock new growth avenues.  ___________________ 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐣𝐮𝐬𝐭 𝐚 𝐭𝐚𝐬𝐭𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐢𝐧𝐭𝐞𝐥 𝐲𝐨𝐮'𝐥𝐥 𝐮𝐧𝐜𝐨𝐯𝐞𝐫 𝐰𝐢𝐭𝐡 𝐚 𝐖𝐡𝐢𝐭𝐞𝐒𝐢𝐠𝐡𝐭 𝐑𝐚𝐝𝐚𝐫 𝐬𝐮𝐛𝐬𝐜𝐫𝐢𝐩𝐭𝐢𝐨𝐧. Supercharge your Fintech IQ with exclusive reports, industry trend breakdowns, and expert analysis on everything shaping the future of finance.  Become a member and steer your business course with actionable intelligence on the winning strategies of leading fintechs - because knowing what's next is the ultimate competitive advantage ➡️: https://lnkd.in/gVfE8Cwg via @WhiteSight #fintech #digitalfinance #digitalbank #profitability #payments #lending #Monzo

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Seriously? None of you could see this coming? 1) Laybuy looking for a buyer (good luck with that) 2) Klarna become credit card company like Zip Co and Afterpay Electronic payments international reports: News of Laybuy’s latest issues coincided this week with the much-predicted launch of the Klarna credit card in the US. In doing so, it is copying Zip and Afterpay. And you can bet they will not be cheap. Zip Pay allows a credit limit of up to $1,000. That comes with a monthly account fee of $9.95. So, the consumer pays $120 just to run the account to get a very low credit limit. These outfits have no option but to be expensive, given the segment of the market they target. And then there is funding costs. They must fund the gap between paying merchants and being paid by consumers, say an average of 28 days on BNPL, but higher for lending products. In the week of Laybuy’s UK fail and on the day of Klarna giving in to the inevitable and launching a credit card and a mere three hours after UK Finance released its latest numbers, another PR release hit the inbox. Gems include a reference to ‘cards decreasing in popularity…why offering BNPL at checkout is a no-brainer.’ Quite bizarre – but sadly consistent and predictable. #payments #bnpl

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🌟 Monzo vs. Monese: Which Neobank Fits Your Banking Style? 🌟 Monzo and Monese are both popular neobanks offering distinct features and services. Our detailed comparison delves into how these two platforms differ in terms of functionality, user experience, and value. Whether you’re looking for comprehensive financial tools, flexible account options, or seamless international transactions, our analysis will help you determine which neobank aligns best with your needs. 👉 Explore our full comparison to find out which neobank is right for you: https://lnkd.in/dieSbwdY #Neobank #Monzo #Monese #DigitalBanking #PersonalFinance #BankingComparison #WhatNeoBank

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Monzo's impressive valuation of $5.9 billion underscores the growing confidence in fintech, driven by strategic fundraising and market expansion. The secondary market sale not only rewards employees but also signals robust investor interest, positioning Monzo favorably against competitors like Revolut. As neobanks evolve, their ability to provide liquidity while delaying a public offering could redefine startup financing strategies. Continued focus on U.S. and European markets will be crucial for sustaining growth and competitive advantage. #fintech #neobanks #startupvaluation #monzo #secondarymarket #banking #crossborderpayments #financialeducation #Payments #openbanking #digitalbanking

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Monzo Bank is the latest tech unicorn to achieve profitable growth after years of depending on large amounts of outside funding to fuel its growth. The company has posted a very nice profit of £15m, with revenues growing 2.5x and deposits growing 88%. Of course, like many fintechs they were helped by the higher interest rates in the last couple of years. But Monzo can take credit for being at the right scale when the interest rates shifted (which they did mostly through building the best customer experience in UK banking) and for pivoting to profitable growth at the right time. I've been a Monzo customer since its alpha days and even invested a bit in one of its crowdfunding rounds, so it's safe to say I'm a diehard fan. Still, I have to say they have never been as innovative and productive as they have in the last couple of years, finally building some revenue-generating products popular with customers. We will have to see if this trend continues, as interest rates are expected to fall over the next few quarters. https://lnkd.in/eHZ5Ayf2

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Saw Monzo's latest results and wanted to share a thought. While Monzo's achievement of a first ever profit and nearly 10 million customers is noteworthy, it also highlights a common concern: the low profitability of digital banks often makes investors reluctant and apprehensive about the sector. However, digital banking is undeniably the way forward, and there are innovative solutions emerging that promise better profitability and growth. I am advising on a pre-seed round for a groundbreaking mobile banking product. This innovative platform allows customers to access high-interest rate current accounts in partnership with existing UK banks. Think of it as the Amazon of current accounts, consistently delivering market-leading interest rates. Impressively, the break-even point is very low. They offer EIS, and if you’re looking for an opportunity to truly revolutionize the mobile banking industry, get in touch to learn more about this investment opportunity. @Koodooka #Banking #Fintech #Investment #Startup

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Last night at The Product Group (Global) here in London... Over 60 professionals across a range of Product experience discussed a topic I'm deeply passionate about: 𝘁𝗵𝗲 𝗣𝗠 𝗶𝗻𝘁𝗲𝗿𝘃𝗶𝗲𝘄 We heard from hiring managers and candidates alike. People from big tech like Google, or fintech companies like GoCardless, and retailers such as Tesco. 𝗪𝗵𝗮𝘁 𝗺𝗮𝗸𝗲𝘀 𝗮 𝗶𝗻𝘁𝗲𝗿𝘃𝗶𝗲𝘄 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲𝘀 𝗴𝗼𝗼𝗱, 𝗲𝘃𝗲𝗻 𝘄𝗵𝗲𝗻 𝘆𝗼𝘂 𝙙𝙤𝙣'𝙩 𝗴𝗲𝘁 𝘁𝗵𝗲 𝗷𝗼𝗯? #1 answer? GOOD FEEDBACK People also value: - Moving quickly - Setting clear expectations - Providing reverse interviews 𝗪𝗵𝗮𝘁 𝗮𝗯𝗼𝘂𝘁 𝗯𝗮𝗱 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲𝘀? - Candidates talking too much - Candidates being strung along - Intense all-day interview loops 𝗛𝗼𝘄 𝗱𝗶𝗱 𝗽𝗲𝗼𝗽𝗹𝗲 𝗳𝗲𝗲𝗹 𝗮𝗯𝗼𝘂𝘁 𝘁𝗮𝗸𝗲 𝗵𝗼𝗺𝗲 𝘁𝗮𝘀𝗸𝘀? There wasn't broad consensus on this. Some prefer them. It enables them to use accommodations they wouldn't otherwise get (like using close captions or screen readers while working). It allows candidates to go deep into a problem space. It's more representative of the actual work. Some abhor them. The interview process already requires a lot of work and is high stakes enough. Take home tasks require more than people may be able to give (especially if they're working and are carers). They're inequitable. And finally, everyone agreed that take home tasks can be gamed with tools, and the value they provide is being diminished as a result. 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗮𝗹 𝘁𝗶𝗽𝘀 - Use the product - Know your CV history - Lookup who your interview is with - Find a framework that works for you - Assume 𝘦𝘷𝘦𝘳𝘺 interaction is an interview - Take to time to THINK before answering - Be vulnerable, ask "are there areas where I didn't show up?" And finally, we got to hear an engaging career story from Deepak Colluru as he described his journey from kernel-level Engineer to sales leader, to Director of Product across Edtech and Fintech. Sadly, it ended at a cliffhanger! As ever, I enjoyed seeing and meeting a diverse group of Product folks including current and future leaders in this space. Catch you all at the next one 👍🏻

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So TS Anil is the mastermind behind the greatest turnaround in tech in the last 10 years. Monzo Bank under TS has gone from £40M revenues to £1BN and profitable. But when TS took over Monzo: Had a 40% down round. Had large layoffs and low employee NPS. Had very little runway. Today we have TS on 20VC in the studio. What are the must asks? #Founder #funding #business #investing #vc #venturecapital #entrepreneur #startup

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From a money transfer app: After I entered the amount to be transferred — This small screen tells a big story about how critical thoughtful UX is in open banking. The Magic of Open Banking in the UK 🌟 Open banking has revolutionized how we manage money. From budgeting apps to instant payments, it puts the user in control of their data and finances. Since its launch in 2018, over 11 million UK users have benefited, making smarter financial decisions with innovative tools powered by open banking. But this is just the start. The future lies in expanding open banking to open finance, breaking barriers, and building trust through simplicity. The UK leads the way—what excites you most about open banking’s potential? #OpenBanking #Fintech #Innovation

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74% of B2B SaaS product managers have a built-in payment wallet on their roadmap… I am a big fan of Gibson Biddle’s DHM model on how to build products that delight customers, in hard-to-copy & margin-enhancing ways. With embedded finance product managers of B2B SaaS companies have the opportunity to hit the three areas. Delight your customers by removing and automating steps in their job-to-done. Create a hard-to-copy advantage by seamlessly weaving fund flows and data into your customer’s processes. Improve your product’s margins by introducing new revenue streams. Interested to learn more? Get a copy of our latest white paper here:

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Klarna's Business Model 💡 Klarna monetizes in three primary ways: 1️⃣ BNPL: merchants pay a variable fee of up to 5.99%. Consumers make three or four equal repayments, with the first due at the time of purchase and the rest at fortnightly or monthly intervals. 2️⃣ Pay in 30 Days: merchants pay a variable fee of up to 5.99%. Customers pay no interest if they pay in full within 30 days. 3️⃣ Financing: the merchant pays a variable fee of up to 3.29%. Consumers can choose the term of their loan, and they will pay interest accordingly. When shoppers pay with Klarna’s BNPL or Pay in 30 days, Klarna pays retailers the full transaction amount less 3 - 6% merchant commission. Klarna absorbs the transaction processing fees and chargeback costs for retailers. All credit default risks from the shoppers are also transferred to Klarna. Klarna’s net transaction margin is the merchant fee it collects less the variable costs associated with facilitating the sale. The key variable costs in the business are: 1️⃣ Processing fees paid to Visa, Mastercard and Stripe 2️⃣ Borrowing costs reflect that Klarna has to fund the gap between paying the merchant and collecting from consumers who would take up to 2 months to repay 3️⃣ Bad debt expenses as it is essentially providing credit to the shopper and would inevitably experience some defaults This business model is working capital intensive given that it pays retailers upfront, and only collects from the consumers over 6 to 8 weeks. During its first Christmas season, Klarna faced a funding mismatch with its retailers requiring upfront payments, and its customers having 30 days to repay. In 2023, Klarna's consumer credit loss rate improved to 0.38% The short-duration nature of BNPL provides a significant advantage to traditional credit providers because higher capital velocity means higher asset turnover, therefore, higher return on capital. The average duration of Klarna’s credit portfolio is ~40 days. This means the company can recycle its capital 9 times per year (365 days / 40 days = 9.125). Assuming 1.5% net transaction margin and 30% pre-tax margin, each $100 would generate $100 x 1.5% x 30% margin x 9 loans per year = $4. Source: Sacra - https://t.ly/25_yi #Innovation #Fintech #Banking #Ecommerce #Retail #OpenBanking #API #FinancialServices #Payments #Loans #BNPL #Transactions

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What's next for Monzo Bank to retain (and improve) this level of profitability? Is it entering a new market, seeking both geographic and product expansion. The UK market is very consolidated, a difficult market to break in. What are the countries and/or segment available for Monzo to break in? #financialservices #innovation #leadership

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Monzo Bank is now the UK’s 7th largest bank with over 7.5 million users. What's surprising about this, is that they ✨ still ✨ grow through PLG 9 years after launch... Last year, Monzo's revenue grew 2.3X and new customers increased by 1.6 million - 66% of which came from word of mouth. It also hit profitability for the first time 💸 In the early days, PLG came in the form of their Willy-Wonka-style referral scheme and the bright orange debit card that quickly spread through London and other major cities. The Bandwagon Effect and Scarcity Principle made people wanna bag the cool, hard-to-get card for themselves 🧠🧠 Nowadays, I suspect that strong Product Market Fit and Network Effects drive growth. The Network Effect of the frictionless transfers between Monzo users means that Monzo is better when more people are on it. You’re incentivised to share with your friends. Their value proposition of 'banking made easy' is continuously delivered on too, with easy-to-open pots, seamless UI, good interest rates on savings, piggy banks, round ups & more. I’ve had Monzo for over five years now. I’ve fallen out of love with it at times, and fiercely relied on it at others. But there is a lot to learn about PLG and PMF with Monzo. Interested to see where they take the product in 2024 +. Do you bank with Monzo? Love/hate? let me know 👀

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Has the killer app for Open Banking just got one step closer? The Payment Systems Regulator has just announced plans to expand Variable Recurring Payments (VRPs). VRP's have long been touted as the successor to the UK's incredibly successful Direct Debit payments, however their rollout has been met with a number of challenges. We're not there yet but this statement from the PSR is very encouraging. 1️⃣ Beyond Sweeping: We've moving from "me-to-me" payments to using VRP for recurring payments for utilities, government services, and subscriptions. 2️⃣ Widening Participation: The mandation of participation for the 9 largest banks and building societies in the intiial rolloutof Open Banking was crucial to getting the ball rolling. Many non-mandated FIs quickly followed suit but the PSR is supportive of widening the mandate to ensure broad adoption. 3️⃣ Pricing Models Under Scrutiny: The debate on API access pricing continues. Will we see a centralised approach, or will the market decide? 4️⃣ Liability and Consumer Protection: The industry is still grappling with these issues. The PSR's approach here could make or break VRP adoption. The real-time nature of OB VRP's will open new fraud vectors for scammers to exploit. 5️⃣ User Experience is Key: Remember, over 65% of users abandon complex checkouts and this has been a barrier to adoption of existing OB payments. VRPs promise simplicity - but can they deliver? As the payments landscape evolves, staying ahead of these changes and their implications is crucial for managing risks and seizing opportunities. https://lnkd.in/eDkbpjx9

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Neobanks Are Plentiful But Rarely Profitable... Well, one just broke even for the first time. The Challenger Bank Monzo Bank, which was launched in 2015, reports first profit in a 'landmark year of record growth,' fueled by its Savings Pots feature. Monzo said it was benefiting from having more customers depositing more cash in their accounts but makes higher provisions for bad loans. Monzo reported a $19.2m pre-tax profit in the year to the end of March, up from a $145.2m loss the year before. Revenue more than doubled in the period to $1.1B, as the fintech’s net interest income rose 167% to $545.9m thanks to higher interest rates. Monzo said its loan book had grown 84% to $1.7B, comprising overdrafts, unsecured personal loans, and Monzo Flex, its BNPL card used by 500K customers. However, alongside that increase, Monzo raised its provisions for expected credit losses to $220.2m, up from $125.9m, as more of its customers struggled to make repayments and fell into arrears. The bank said it expected the provisions for credit losses to continue to grow. Customer deposits have surged by 88% to $14 billion! What's the bank strategy for this growth? Monzo revealed that the bank saw record numbers of savings pots created over the past year. Customers can set money aside for a specific goal or round up everyday spending and put the cash in a "piggy bank." Access Savings Pots have proven to be a hit. In just over a year, 1.3m customers opened an Instant Access Savings Pot, depositing a total of $6.8 billion in FY2024! Yes, nearly 50% of its deposits were generated by this pot feature! Monzo is now preparing its second attempt to launch in the US and announced plans to enter the European market by first entering Ireland, where it said it would open an office in the coming months. Monzo has so far been focusing on introducing US customers to the power of Pots. Well, the concept itself is not groundbreaking, and the underlying technology supporting it is not one that can be offered by a legacy core or a simple ledger. Similar features have been adopted by prominent players in the fintech industry, such as Current, Nubank, and Revolut, each with their own terminology, such as envelopes, pockets, pots, vaults, or caixinhas. If you're a Community Bank, Credit Union, or Fintech looking to have a best-in-class offering, you need to integrate this functionality. Look no further. Agora (Financial Technologies formerly Agora Services) has already developed this feature through our cutting-edge modular banking platform and more that you can plug into your App through our APIs or leverage our white label Apps. Imagine effortlessly opening sub-accounts in real-time for savings, sharing transactions with loved ones through dedicated accounts, or managing specific expenses like bills, invoices, or healthcare costs. The possibilities are endless with Agora's modular banking platform. Create the banking products your customers need over your core or as a side core.

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The OpenAI Customer Stories are always great reads and often reveal leaps of progress being made by industry. The previous one by Klarna certainly sparked a lot of debate and consideration, mostly positive. This one on Moderna has me a little stumped. By and large, it can be said the "GPT" paradigm as the replacement for the App Store paradigm has not worked. There are a few active apps and builders, but they are only now exploring monetization. I recently wrote about this, link in comments. Then we have this case study, where a regulated company has built 750 (!!!) internal GPT apps, most built by staff themselves. I don't doubt the sincerity of either company, but it does surprise me to see adoption at this scale given the lackluster reception, and also the challenges of quality control for these apps in the absence of mature "AI Ops". I've built a few GPTs myself, and I'm not sure I'd feel great as the COO of Moderna knowing how little monitoring and control you have over the outputs and their quality. What does everyone else think? Is this just great marketing, or are most experts wrong about the GPT paradigm? #openai #gpt #aitransformation #genai #ainative

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