Monzo CEO on how the UK company is building a banking giant around community

If you’re in the U.S., you may not have heard of the hottest new trend in mobile banking. Founded four years ago in the U.K., Monzo is a fully-regulated, digital-only challenger bank. The company has shown phenomenal growth in the past two years, going from 100,000 customers to over a million and a half customers. Today, one in eight new bank accounts in the U.K. are opened with Monzo.

Fascinated by this rate of growth, we spoke with Monzo co-founder and CEO Tom Blomfield. Here’s what we learned:

1. As a challenger bank, Monzo differentiates itself by being community-driven.

For those not in the know, a challenger bank is a relatively new, small retail bank squaring up against the “big four” of British banking: Barclays, HSBC, Lloyds Banking Group, and the Royal Bank of Scotland Group. To be a challenger bank means just that: to challenge the status quo of banking by implementing modern fintech solutions in ways that traditional banks haven’t explored just yet.

Above all, Tom noted that community is the cornerstone of Monzo’s brand as he reflected on Monzo’s early days. “We went to our community and sort of shared the challenge and asked for help,” Tom said. “I think that’s a big part of the brand, naturally, being both transparent and genuinely community driven. I think it’s a way that we built trust without having the multi-million pound marketing budget, or big branches, columns outside. The typical marks of old, trusted institutions. We couldn’t afford that, frankly, and I’m not sure they would work today either.”

2. Monzo is broadening its audience by supporting diversity initiatives.

Though Monzo is broadening its user base, it had a cult-like following among urban tech geeks, possibly related to their early coverage in publications like TechCrunch. “ our first probably 10,000 customers honestly were 95% male, and they probably worked in London, probably worked in technology, and 100% iPhone, which again does skew your demographic somewhat,” Tom said. Nowadays, that the split is closer to 50/50 male/female. While Monzo has grown significantly outside London, the nation’s capital remains a concentrated user base.

As a brand, Monzo supports various diversity initiatives and even spoken out against transphobia on the company’s official Twitter. “We genuinely want to try to work with the society which we operate, and to give something back, and leave the world slightly better than we found it. I think that’s something a lot of our staff and our customers really identify with,” Tom said. What strikes Tom as interesting is that Monzo’s values don’t just leave them with an audience of liberal metropolitan elites. He is glad to see that middle-aged and older people and people living in rural areas are also drawn to Monzo’s services and mission. “It doesn’t threaten them in any way,” Tom said. “You don’t exclude them by talking about issues that might be seen as political.”

3. Monzo wants to make customers the center of gravity in the banking world.

Monzo wants to be one singular interface for all of their customers’ money. “Imagine a big company actually looking out for your customers interest and fighting back against these predatory price mechanics,” Tom said. “That’s what I’m really excited about building. I think you can do it in a lot of the things you mentioned, in mortgages, insurance. I think a lot of these things will come to Monzo really very soon, to enable us to be the hub and then plug in the spokes.”

For Tom, this outlook is what will shape the future of banking at Monzo and more broadly. At Monzo, the customer is the center of gravity. At big banks, the financial product is at the core. “The mortgage is the thing that everyone thinks about, and everything rotates and revolves, orbits around the mortgage. The customer orbits around the mortgage, the customer is a temporary annoyance before you can get the mortgage and start making some money out of it. The banks think about their financial products. Imagine a different world view where the customer was the center of gravity and everything had to shape itself around the customer to make it easy for the customer. That would intuitively feels a more natural way to think about your money. But for big banks, that’s an incredible mindset to shift.”

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To listen to our interview with Tom, check out Episode 58 of KindredCast, embedded below, and available on Apple Podcasts, Stitcher, or wherever you get your podcasts.