Would You Do Your Banking with a Tech Startup?

by Joseph Walent 0

The idea of trust figures heavily in for those of us that hand over our money to an institution for safekeeping. Trust that one will have access to their funds. Trust that their funds will be there. Trust that the company will be around. Trust that the institution will do what it says it will do. The architecture employed by banks have typically embodied the characteristics many of us associate with trust. Conservative. Solidity. Traditional.

So the ideal of the trusted institutions is alive and well, still present in our consciousness. However, the news we get paints a different picture, with some of these institutions acting instead purely in their own interest and trampling on the trust of their clients upon which they are built.

Startups that do not have the pedigree of many banks are indeed breaking into the space with innovative offerings and services that empower their clients. The article focuses on the service differentiated services offered by one such company.

So here’s what Monzo is today: a pre-paid MasterCard, issued by Wirecard Solutions, with deep hooks into a companion app which offers a real-time log of your spending and control over how the card is used.

The granularity of information is extended beyond review and restrictions.

That means that not only can the app show you what you spent, it can tag it to the physical location of the store, pull the logo of the brand, and let you sort your spending by location, category, or cost.

It also allows increased levels of direct oversight and control.

There are other draws, concerning safety and security. The app allows a user to freeze and unfreeze cards at will – perfect for those “where’s my wallet?! Oh, there it is” moments – and can report when and why transactions fail as well as when they succeed.

Mercator Advisory Group recognizes that it is less likely that a Monzo account will be where many of us would choose the park our life-savings, but it does offer a greater level of control and insight into our own personal spending habits. As personal financial management applications become more robust, concatenating the spending trails we leave, the opportunity afforded to fintech entities to play a role in our transactional lives will increase. We can allocate find and set budgets. The progress to a true IoT is accelerating. Having strict real-time control over the payment vehicles we designate to these connected devices to spend our funds as directed will become vital, and Monzo and its fintech peers are helping to put that capability in our hands.

Overview by Joseph Walent, Associate Director, Customer Interaction Advisory Service at Mercator Advisory Group

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