Neobanked - 017 An apparition of neos

More neobanks are coming, as Monzo faces challenges.

Throughout 2020 I’ll be publishing a newsletter called Neobanked. Issue 017 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 annual report stresses impact of COVID-19

The neobank has stated there’s “significant doubt” on their ability to continue as a going concern. Monzo made a loss of £114m for the year but has recently launched several paid for services (Plus and Business Banking) that are hoped to turn things around.

Curve partners with Onfido for onboarding

Onfido’s technology will now power Curve’s identity verification and KYC processes during account creation. Onfido uses image recognition to verify documents and likeness.

Sync raises £5.5m seed round

A new neobank has emerged, founded by Revolut’s former head of product design and strategy. Sync claims to be the world’s first smart bank - a single financial hub for all accounts and cards across numerous currencies, all linked to a product marketplace.

Curve Credit aiming for a big launch

Curve Credit, billed as a competitor to Klarna’s point of sale financing, is aiming to acquire 300,000 UK customers in its first three years and launch in the US by the end of year one. The credit proposition allows users to split purchases into instalment plans and retroactively apply the credit to past purchases.

New and upcoming feature releases

Lanistar Bank beta opens

Not much is known about Lanistar at the moment but beta access requires only an email address. Lanistar will leverage “open banking and polymorphic technology”, whatever that means.

Bunq to offer mortgages

The Dutch bank has set aside €100m of deposits to lend to mortgage seekers in the Netherlands. Sticky with their focus on user control, Bunq customers can choose to invest their savings in mortgages.

Revolut launches Open Banking in Italy

The neobank’s 400,000 Italian customers can now access account aggregation with the app, built in partnership with TrueLayer.

With Monzo trying to keep afloat through COVID-19, it’s interesting to see a number of new neobank’s launching. Lanistar, Sync, and Frost are all taking initial sign-ups and Open Banking is a key part of their propositions. The large neobanks haven’t seen a massively positive customer response from their Open Banking integrations and marketplace models have failed to gain traction. Perhaps it was due to timing, but more likely it’s a result of poor product-market fit.

Written on August 9, 2020