I want to create a lender that people don't hate, says challenger bank chair

Neil Ainger, Writer at

"It's clear to me people hate their banks but don't leave until something goes wrong," said Denise Kingsmill, the chair of the board at U.K. challenger bank Monzo, on Tuesday.

"I want to create something that people don't hate; that they trust," said Kingsmill during the opening panel at the 2017 SWIFT Business Forum in London.

Monzo started two years ago and "have just got our banking license". The mobile-only new digital bank, which wants to displace established U.K. retail banks, uses big data analytics and financial technology (FinTech) to try to serve ordinary customers better.

"We've raised £35 million ($44.9 million) in capital via long-term investors and £1 million on the CrowdCube crowdfunding website in 96 seconds, largely as a marketing exercise and to get customer buy-in. They were limited to £500 each," explained Kingsmill.

Speaking to exclusively afterwards, Kingsmill revealed there are 170,000 customers on Monzo's waiting list, "who are being on-boarded now in 10,000 person groups prior to our imminent go live."

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Monzo has only one product at the moment: Its current account and they don't pay interest on it because they expect customers to opt for its promised better 24x7 customer service, or go for a savings account elsewhere.

"I'm not a banker, I am a lawyer," added Kingsmill during the panel session at the event entitled "Building Tomorrow, Today".

She is a former U.K. regulator, but she believes "too many bankers have never done anything but banking," and are consequently unaware of how other sectors work or the human aspects of providing a good service, particularly to millennial customers that live on their mobile phone.

However, the U.K. retail banking industry has experienced non-banking heads before, most notably when ex-retailer Andy Hornby was chief executive at HBOS prior to its rescue in 2008 by Lloyds Bank, so some of the banking audience questioned her reasoning. "There might be a danger in non-banking people leading organizations," cautioned attendee Bob Lyddon of Lyddon Consulting.

No Uber moment for Fintech just yet: Financial services firm

Kingsmill was frank in her assessment of the challenges when launching a new retail bank in the U.K., admitting "the journey has had its ups and downs" and there have been "the usual issues with people coming and going."

She also called for a two-track regulatory procedure in the U.K. to approve new challenger banks that was less paper-based and onerous on smaller newcomers. "We are seeing more banks come through in the U.K., but it's not easy."

Some challenger banks, such as Tandem Bank have fallen after House of Fraser, the Chinese-owned U.K. department-store chain, rescinded most of its £35 million investment. But lots of others such as Atom, Starling and so forth remain. How many will thrive in future years remains to be seen.

"We anticipate growing our current account customers into a financial hub for the business," said Kingsmill, citing WeChat in China which has taken the opposite path turning their community into WeBank. "We've talked with them."

The fintech duopoly in China

Fellow panelist at the event, Gottfried Leibbrandt, the CEO of SWIFT, cited the key challenges and opportunities facing the industry as FinTechs, whether from a developmental co-operation model or a displacement threat; cyber-security; emerging technologies, "such as artificial intelligence (AI) and the blockchain", plus globalization. "After all, WeChat is coming to Europe," he said.

Meanwhile, Jean-François Legault, global head of cybersecurity operations at JPMorgan, addressed the many cybersecurity issues facing retail and investment bankers, which is top of mind for many SWIFT users in attendance after last year's infamous hack attack versus Bangladesh Bank.

All SWIFT users are now expected to self-attest this year that they meet minimum security arrangements in order to gain access to the network and cyber was a key focus at the show.