Neobanked - 023 Revitalising tradition

Zopa and Tandem go after the bloat.


Throughout 2020 I’ll be publishing a newsletter called Neobanked. Issue 023 is below and you can subscribe here. Any thoughts or ideas are always welcome, get in touch!


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

Monzo ending original Plus proposition in January 202

The original Plus proposition launched in early 2019 at £3 per month for early adopters. Customers weren’t forced to move to newer iterations until now, with Monzo announcing the end of the original pricing and features. Existing cards will continue to work but insurance, discounts, and interest on current account balances will end.

Tandem ups their Autosavings interest rate to 0.75%

The bank’s instant access savings account now earns 0.75%, up from 0.5% previously. With many banks cutting rates, this gives Tandem a window to reinvigorate their user base.

Revolut joins the other neobanks in charging basic users for card replacements

Standard card delivery will cost £5 and express will cost ~£20, which apply to basic free accounts and junior accounts. Monzo and Starling announced similar changes in the past few months; all have arrived at similar price points.


New and upcoming feature releases

Zopa credit card now available

The blue and teal card comes with a Safety Net feature, which puts aside part of a users credit limit for emergency use. It also includes typical features like app notifications for purchases, categorisation, the ability to freeze the card, and block certain types of purchases like gambling. Zopa aren’t doing anything special on the rate (in-line with market), cashback, or points side of things.


Noise from Tandem and Zopa in the broader banking market reminded me of their early forays into non-traditional financial products; Zopa started with P2P lending and Tandem went all-in on Open Banking whilst purchasing Harrods Bank’s closed mortgage book. They’ve both since moved on from these after failing to achieve product-market fit and are now rolling out extremely traditional products backed by modern technology and distribution. Over time, perhaps Tandem will become the modern equivalent of a building society and Zopa will revitalise the UK near-prime credit card market. Banking isn’t broken, as many would have you believe; it’s simply bloated and conservative but that is no longer acceptable to most.

Written on November 8, 2020