In October last year, a survey by the UK’s Competition and Markets Authority revealed that over half of banking customers in Britain had been with the same current account provider for ten years. In the same study, over a third said they had been with their bank for twenty. Many of these people are happy customers with little reason to change – but there are others who stay either because switching is too much hassle or because the competition doesn’t seem all that different.
A new group of banking startups is attempting to rival legacy banks with mobile services that make it easier to manage your money online. Atom, backed by Spanish bank BBVA, became the first mobile-only bank to receive a licence from the Bank of England last summer, followed by Tandem a few months later and now, Mondo is hoping to follow in its competitors’ footsteps.
Mondo was founded by digital entrepreneur Tom Blomfield and a handful of former colleagues from banking startup Starling. Mondo is still awaiting its banking licence but currently offers a prepaid Mastercard debit card and an app allowing you to view transactions and send and receive payments. The app is still in beta but has over 20,000 users and a waiting list of over 150,000.
What’s most surprising about Mondo is how easy it is to get setup and track your spending online. There’s none of the usual faff associated with opening a bank account – just subscribe to the waiting list and, when your card is ready, you’ll be asked to transfer £100 to your account to receive it. Mondo verifies each customer’s identity by asking them to record a short video clip and take a photograph of their passport or driving license from within the app, meaning no paperwork or proof of address is required.
Payments show up almost instantly – buy a coffee in the morning and you’ll receive a push notification showing what you’ve spent, complete with a coffee cup emoji (see above). Your available balance is updated immediately and transactions are clearly displayed with the name of the company and its logo. Sending money to other users is equally straightforward – tap ‘send money’, select a name from your phonebook and funds will be instantly added to their account. If your card is lost or stolen, you can freeze it from within the app and defrost it if you find it again, or order a new one.
All of this may sound fairly unremarkable – features that should be commonplace in mobile banking apps. But they’re not. In most apps offered by legacy banks, payments won’t show up for two or three days and when they do, they appear as a complicated transaction number, making it difficult to remember what the payment was for, when it took place and how much money is left in your account. Doing anything other than viewing a balance or paying a bill usually requires logging in to a computer or making a call to a helpline.
Hugo Cornejo, who heads up Mondo’s design team (made up of Cornejo, graphic designer Samuel Michael and product designer Zander Brade), says its app aims to deliver the same level of service customers are used to seeing from the likes of Netflix or Amazon. “The most important thing, for me, is that it works like any other world class service you use. If I need to send someone something I use Dropbox or WeTransfer and it just works. If I want to call a car on Uber or upload a picture on Instagram I tap a button and it works. That’s what Mondo should do,” he says. Cornejo says the company does “a huge amount of work behind-the-scenes” to make it easier for customers to see what they’re spending and where – something that legacy banks, with their outdated storage systems and technology, are struggling to do.
In its visual identity and tone of voice, Mondo takes a very different approach from brick-and-mortar banks. Its colourful logo is designed with iPhone home screens in mind, its cards are fluorescent orange and customer messages feature cheerful emoji and exclamation marks. The app has a simple layout but features some lovely animations – a running card character appears alongside a short message when your card is on the way, adding some humour and visual interest to what would otherwise be a dull holding page.
“I think we are quite good at separating the architecture and interior design of things,” says Cornejo. “We have a very functional building – the app is very fast, it’s easy to use and you can find your way around easily, but there are rooms and corridors where you have to wait. That’s where you can have animations and where you can delight, when there is no immediate action to perform, because people are in the mood for that. A legacy bank will probably tell you ‘Your request has been accepted’ and talk like a robot but we show you a lovely little guy running with your card to tell you it’s on its way. Both things mean the same, but those little details show we care, they’re more human,” he says.
Mondo’s focus on transparency and offering a human touch has been key to its success so far. The company posts regular articles on its blog about what the team is working on and has a community forum where beta users can offer feedback – from complaints and concerns to suggestions for new features. Everyone at Mondo is asked to work on customer support from time to time, chatting with customers and answering their questions within the app, and the company regularly invites users in to hear what they think of the service so far. On the community forum, members of the team respond to users in detail, asking them questions about their comments and in some cases, updating or tweaking the app in response to their suggestions.
“Sometimes there are things that aren’t perfect but we listen to customers and we say sorry and we fix them. I think there’s tonnes of value in that, in seeing the people behind this – it’s not so common in banking,” says Cornejo.
For the design team, this has proved an invaluable experience. “I wasn’t particularly sold on the idea in the beginning because as a designer, if you’re working on something and it’s not finished, but you want to see what people think of it, you need to adjust your own expectations and perfectionism. But the feedback has been great,” he adds. “A lot of people will ask about features we’ve already thought of … but sometimes they will tell us things we didn’t know – like an Apple update that can help make the app more secure.”
Mondo has also opened up its API, allowing developers to use its software to create apps and widgets that are compatible with Mondo. It regularly runs hackathons to see what coders can create using its technology and has a developer forum where coders can share what they’ve done.
“It means that anyone can go and build apps for themselves using Mondo,” explains Cornejo. “For example, we don’t have a Windows app currently, but if you have a Windows phone, you can go and build your own,” adds Cornejo. “We get good insights from what people are trying to build, whether it’s things related to notifications or things that connect Mondo to other apps,” he says. Recent ideas to come out of a hackathon include the ability to connect Mondo with other services such as Citymapper, allowing the app to suggest cheaper routes or times to travel to customers, and a desktop widget allowing you to view your balance on a Mac.
As well as providing Mondo with ideas for future development, working closely with customers and developers has helped the company understand what does and doesn’t work in its service and what needs to be improved on while the app is still in beta.
“It’s totally pragmatic. If we rolled out an app and no-one liked it and it doesn’t work, we’d have wasted a lot of money … you’re basically building a trap for yourself. You could get away with it and everyone could love your product, but it could go the other way. We haven’t made any big mistakes yet but with small mistakes, you can fix things easily and you learn and make things better. If you do everything behind the scenes, you might not see a problem until it’s too late.”
“I think it’s really important in finance as well,” he continues. “People manage their money in very different ways … and you can’t simulate that, you need to speak to many people and start identifying patterns and then you learn tonnes of valuable stuff.”
Cornejo admits that Mondo’s customer base is currently made up of early adopters – mostly, affluent males with a keen interest in tech. “It used to just be people around Old Street and that’s not longer the case but we still have a huge bias,” he says. The app is unlikely to appeal to those who prefer to do their banking in person but once it receives its licence, and can offer full current accounts, Cornejo hopes it will attract anyone who already uses mobile apps to shop, chat or manage their life and is frustrated with some of the inefficiencies that exist in digital banking.
“People always say it’s just millennials but it’s not, it’s anyone who lives their life on their phone, to a certain degree, and trusts their phone and expects good services out of it,” he says. “If it doesn’t bother you that banks aren’t very good at giving information in real time, or that they aren’t very transparent, then you’re not going to see the value in us probably, but if you’re that person who started using Amazon or Deliveroo and thought, ‘this is amazing’…. That mentality is growing,” he adds. With its customer base mainly growing by word of mouth, Cornejo says the team must now figure out how to reach people who aren’t friends or fans of Mondo and convince them of its benefits. Key to that, he says, is making a service that “just works”.
When designing a banking experience, one of the biggest challenges is creating something that feels new and different but is sensitive to customers’ expectations. There are certain things people expect from a bank, whether in terms of security or printed communications – for example, a welcome letter with your card or a pin number delivered in the post. Mondo sends pins via text, recommending users update them immediately – a move that has been questioned by users concerned over security on its forum.
“That’s such a difficult problem because many of those expectations are built on things that are not real anymore – for example, every time you pay there’s this concept of pending transactions,” he says. “Basically, you buy a coffee in the morning, open your app and the coffee’s not there – it’s going to take two days to show up, because in those two days, technically the transaction is pending, so it can settle or it can not. In 99.999% of cases it does settle, so we removed that obstruction. If it doesn’t settle, we’ll remove [the payment] but the default is that it will show up instantly. Some people had problems with that because they’re so used to the classic way of doing things – they almost miss it to a certain degree. I think for things that don’t happen so often, you can have a more old school approach, so you can push a bit harder with the things that happen everyday and hopefully raise people’s expectations,” he adds.
With its current accounts, Mondo hopes to allow customers to set up overdrafts, direct debits and standing orders. Eventually, it plans to create “a financial hub” for customers – a service that can connect with other apps to help customers manage their money more efficiently and even secure mortgages by allowing Mondo to share data with providers and compile a list of competitive offers.
Whether Mondo can retain its personal touch as it grows bigger remains to be seen, but with its user-centred approach to design and a small and nimble creative team, it has a clear advantage over traditional high street banks when it comes to innovation.
“Traditional banks are packed with really smart and talented people – I’ve worked for banks in Spain and they have some of the best designers, in beautiful massive offices in the city … but the problem is their organisations aren’t ready to be innovative. They built their systems in the sixties and seventies, so there’s usually room somewhere that’s still running software that is really old, and you have teams building things that are never going to be released. We built our technology a year-and-a-half ago, so it’s state of the art, and when we build things, they show up in the app three or four days later. It’s a very small and lean time and a very quick turnaround – a designer, that’s amazing,” he says.
For startups like Mondo – and Atom, Starling and Tandem – this ability to innovate quickly and deliver a more user-friendly service is their biggest selling point. Without the heritage of a legacy bank, or a reassuring physical presence on the high street, their success lies in putting customers’ needs first to deliver a service that people both enjoy using and come to trust. “We try to make common sense business decisions of course but all of our decisions are focused on making a better product, something that people will love and I think the whole company is based on that,” says Cornejo.
As Cornejo points out, many legacy banks aren’t quite so interested in putting customer’s needs at the heart of their service. Banks have a vested interest in a customer’s balance falling below zero – most of them charge a fee for doing so – so it’s little surprise they’re not rushing to help people track their spending and avoid being overdrawn. But with rival companies like Mondo, Atom, Starlight and Tandem attracting hundreds of thousands of users, it’s clear these banks will have to up their game – and provide a more efficient and transparent service – if they want to keep hold of those long-standing customers.