"Monzo Stole My Money" picked up by the media

Looks like that FaceBook group has been picked up by the press (by press I mean random blogger :rofl: ) edited due to general concencus this guy knows his stuff :slight_smile:

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He looks more like an industry expert than a random blogger to meā€¦?

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Quite an interesting read, though he seems to say that the problem is checks that havenā€™t been done on existing pre-paid card customers moved over to have the full bank account - but Iā€™d be surprised if that was the majority of accounts being closed like this?

It definitely seems to be the case that Monzo have a very twitchy fraud algorithm which then goes straight to account closure - possibly a cold commercial calculation that accounts that even have a whiff of ā€˜dodgynessā€™ will never be profitable so better to get rid rather than paying for a human to review further?

There have also been an uptick in reports of non-immediate account closures by Monzo recently, where they give the holder two months notice, so not fraud related. Another sign of Monzo simply looking to dump unprofitable customers?

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I have edited my post accordingly :slight_smile:

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I would love to know the proportion of Monzo customers who are not U.K. resident, by that I mean, actually live abroad full time but have managed to open an account whilst visiting the U.K either staying with extended family or here at Uni etc. If thereā€™s a lot of activity on someones account in another country, then surely Monzo are going to pick up on this? Would this be a reason for inexplicably closing someones account?

My theory here is related to emails I received from Monzo, N26, and Atom Bank after signing up with them. In some cases these were sent a year after becoming a customer, or in n26ā€™s case a few months.

I donā€™t recall if they were asking for my national insurance or tax residence status, or both. But the emails from all 3 were quite clear in that they should have collected those details upon sign up and theyā€™re a requirement to continue providing services to me. I probed Atom bank, as they were the first to do anything like this, asking what would happen if I didnā€™t provide the required info. I was told they would not be able to provide financial services to me without it, and my account would inevitably be closed.

I do wonder if thatā€™s playing a large role in what weā€™re seeing happen with Monzo. Perhaps some folk didnā€™t supply the info or never saw the email. But Chris Skinnerā€™s speculation does add some credence to my theory. I expect though, itā€™s more likely a multitude of things that slipped through the net, and theyā€™re now clamping down on it.

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Chris Skinner has a newer post here, which addresses his concerns to the winder fintech industry:

It really hits home and solidifies what he believes to be the root of the issues. It makes a lot of sense. And I think itā€™s explained better here than in the article focusing on Monzo.

The issue is that a lot of challengers donā€™t appear to have done effective KYC and AML in their customer onboarding. Now, they are doing this retrospectively and itā€™s pissing off customers big time, mainly because they are freezing or closing accounts during the process. No wonder customers are unhappy. If youā€™ve been happily running an account for a year or two and suddenly it is frozen or shut-down, with no notice or explanation, itā€™s annoying and, for some, life shattering as per the email I received.

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Iā€™m thinking the best part of FinTech is where they donā€™t do what banks do or, maybe more importantly, have bankers organise what banks do and focus on the bits that banks do badly or donā€™t do at all.

This is an interesting observation, because I think I share it. My actual fintech use is tiny. Starling for Euro and sole trader accounts, Revolut for my kidā€™s account. Thatā€™s essentially it.

For serious banking I use ā€œlegacyā€ banks and credit card providers, and many here seem to do the same. The reasons are: better customer support, better financial products (cashback, rewards, interest rates), more trust (particularly trust that should something go wrong, I can get hold of them).

So, I think I agree with him. And I think fintechs have a very long way to go to catch up with their legacy counterparts. Yes, they migh have shiny new apps, but otherwise :man_shrugging:

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