They haven't raised £1m, they've had enough people sign up as "interested to invest" to reach £1m if everyone follows through.
I signed up to invest £1000, but I haven't paid yet and have absolutely no obligation to, and as far as I know I also don't have to invest the full £1000, I just can't exceed that.
edit: Their crowdcube page shows them having £600k so far
What they did is essentially handle crowdcube's load.
They couldn't take all of them at once so they made an app that could and sent the links to the first 1m pledged users gradually, so not as to crash their servers.
But it is far from dishonest, when you pledge to crowdcube they don't take the money anyway, at least until after the round is over.
Also a few people got in on Monday so they actually raised a bit more than 1m, the last few on crowdcube with the links valid links wont get through.
In addition to those that don't get a chance to invest there's a whole line of people above the 1m..
I fell outside the 1m 36s cutoff, despite my system clock still reading 13:01 when I got confirmation, probably only because I stopped to skim the T&C.
Better software can only get you so far in banking. At the end of the day, they need to borrow and loan profitability and provide services at a low cost. In addition, they need customers, which are not easy to acquire for a new bank. Not having physical branches is definitely a cost saver; however, I’ve seen some surveys that indicate people still want access to some sort of physical branch.
According to their previous Techcrunch article [0], they are writing their own full-stack banking software. Writing your own banking core, external facing software, and internal process software is a massive undertaking, especially dealing with all the regulation and certification processes with third parties. You then become not only a bank but a specialized software development shop as well. Something traditionally only the big banks can afford. I’m not sure, given they are a bank and software business, that their cost base is 1% or 2% of a traditional bank, as stated in their article [0].
I hope they build something awesome but I think to do something of this size will take more than a few million.
One thing that's quite nice about what they're doing, and rather profitable is the OD system.
With a credit card you have a seperate account, so when you get cash it doesn't have to pay off the card.
With mondo it is a debit card with a current account which can overdraft and interest rates near a credit card (19.9% according to their papers)
This means there's less risk for them and a smaller chance of NPLs as money needs to be paid off to the OD before the account is positive.
While a normal bank can take this view in the aggregate term of a customer's account it encourages the user to engage in more risk taking where the customer can't pay it back.
So you get less risk and the same interest rate.
That being said they do save a lot on software building it in house contrary to hiring someone external to do it for them. If Oracle's standard margin are any indication there's a lot lost this way in terms of cost.
Yeah. The majority of the people are normals. Just as they wouldn't trust a quantum random number generator to replace the spinning ball contraption for lottery drawings, they would not trust a 'branchless bank'.
There is something affirming about a tangible building especially when it comes to money. And that's why bitcoin will never replace shiny transition metal.
This news is important for banking in the UK for the following reasons:
- UK banks are slow to innovate and people (especially younger generation) are getting annoyed. People want a bank that is digitally strong, Mondo's 30k waiting list proves this.
- Banks will become more like platforms. Number26's partnership with TransferWise is an example of this beginning. See Clayton Christensen illustrate this https://youtu.be/oCKZwrfysbM?t=1h19m28s
- The UK is trying to make banking more competitive (last 5 years has had applications for more than 5 new banks, before this there was 1 new bank in 150 years). This policy is working.
What remains to be seen is whether Mondo will make money in the way a traditional bank does.
IMO the biggest challenge for a new banks is customer acquistion, and it looks like Mondo has a pretty good handle on this.
This is hardly true. The UK is one of the only countries which has a couple of simple features in banking no other country has:
- Instant, Free transfers, including from one bank to another. Even on weekends & holidays.
- APIs currently available (under the UK open banking government guidelines)
- Pay to mobile phones (not that cool).
- Debit via a Debit Card out of the Mastercard network (costs something like 6p per transaction or something, not sure of the details but there's no fixed fee)
There are also a couple of other things like their fraud systems in how you can unblock your card without having to call customer sevice. Granted its an annoying robocall.
Some customers also have authentication by voice from recordings via customer service calls.
All this is in addition to what everyone else has we take for granted: Pinsentry, NFC, Chip and Pin.
The list is quite long, but I hardly think the UK banks aren't innovators. By any measure they're doing a good job.
Also check out Barclay's accelerator where they lend out their banking license to startups.
> What remains to be seen is whether Mondo will make money in the way a traditional bank does.
If their £1m in debit card spending is anything to go by they already have roughly £15k in the bank from Acq Bank revenue from Mastercard. This is just in alpha in 3 months with 200? users.
the founders and team are well-established and have a proven track record, and the product is fantastic. I haven't come across a product this good in a long time.
To people saying "UK" as a selling point, doesn't ING work in the UK as well? I'm not saying ING is the future of banking by all means, but they're pretty much (totally if you want) office-less.
So, I am always surprised by these apps. How do they (or Simple) go and convince Citibank or Bank of America to give them their data? What competitiive pressures would make BoA modernize their UI?
[+] [-] shawabawa3|10 years ago|reply
They haven't raised £1m, they've had enough people sign up as "interested to invest" to reach £1m if everyone follows through.
I signed up to invest £1000, but I haven't paid yet and have absolutely no obligation to, and as far as I know I also don't have to invest the full £1000, I just can't exceed that.
edit: Their crowdcube page shows them having £600k so far
[+] [-] xivzgrev|10 years ago|reply
[+] [-] neximo4|10 years ago|reply
They couldn't take all of them at once so they made an app that could and sent the links to the first 1m pledged users gradually, so not as to crash their servers.
But it is far from dishonest, when you pledge to crowdcube they don't take the money anyway, at least until after the round is over.
Also a few people got in on Monday so they actually raised a bit more than 1m, the last few on crowdcube with the links valid links wont get through.
In addition to those that don't get a chance to invest there's a whole line of people above the 1m..
[+] [-] nly|10 years ago|reply
[+] [-] polishninja|10 years ago|reply
According to their previous Techcrunch article [0], they are writing their own full-stack banking software. Writing your own banking core, external facing software, and internal process software is a massive undertaking, especially dealing with all the regulation and certification processes with third parties. You then become not only a bank but a specialized software development shop as well. Something traditionally only the big banks can afford. I’m not sure, given they are a bank and software business, that their cost base is 1% or 2% of a traditional bank, as stated in their article [0].
I hope they build something awesome but I think to do something of this size will take more than a few million.
Disclaimer: I write banking software.
[0] http://techcrunch.com/2015/06/30/mondo-gets-passionate/
[+] [-] neximo4|10 years ago|reply
With a credit card you have a seperate account, so when you get cash it doesn't have to pay off the card.
With mondo it is a debit card with a current account which can overdraft and interest rates near a credit card (19.9% according to their papers)
This means there's less risk for them and a smaller chance of NPLs as money needs to be paid off to the OD before the account is positive.
While a normal bank can take this view in the aggregate term of a customer's account it encourages the user to engage in more risk taking where the customer can't pay it back.
So you get less risk and the same interest rate.
That being said they do save a lot on software building it in house contrary to hiring someone external to do it for them. If Oracle's standard margin are any indication there's a lot lost this way in terms of cost.
[+] [-] diskcat|10 years ago|reply
There is something affirming about a tangible building especially when it comes to money. And that's why bitcoin will never replace shiny transition metal.
[+] [-] ultimatejman|10 years ago|reply
- UK banks are slow to innovate and people (especially younger generation) are getting annoyed. People want a bank that is digitally strong, Mondo's 30k waiting list proves this.
- Banks will become more like platforms. Number26's partnership with TransferWise is an example of this beginning. See Clayton Christensen illustrate this https://youtu.be/oCKZwrfysbM?t=1h19m28s
- The UK is trying to make banking more competitive (last 5 years has had applications for more than 5 new banks, before this there was 1 new bank in 150 years). This policy is working.
What remains to be seen is whether Mondo will make money in the way a traditional bank does.
IMO the biggest challenge for a new banks is customer acquistion, and it looks like Mondo has a pretty good handle on this.
[+] [-] neximo4|10 years ago|reply
This is hardly true. The UK is one of the only countries which has a couple of simple features in banking no other country has:
- Instant, Free transfers, including from one bank to another. Even on weekends & holidays.
- APIs currently available (under the UK open banking government guidelines)
- Pay to mobile phones (not that cool).
- Debit via a Debit Card out of the Mastercard network (costs something like 6p per transaction or something, not sure of the details but there's no fixed fee)
There are also a couple of other things like their fraud systems in how you can unblock your card without having to call customer sevice. Granted its an annoying robocall.
Some customers also have authentication by voice from recordings via customer service calls.
All this is in addition to what everyone else has we take for granted: Pinsentry, NFC, Chip and Pin.
The list is quite long, but I hardly think the UK banks aren't innovators. By any measure they're doing a good job.
Also check out Barclay's accelerator where they lend out their banking license to startups.
> What remains to be seen is whether Mondo will make money in the way a traditional bank does.
If their £1m in debit card spending is anything to go by they already have roughly £15k in the bank from Acq Bank revenue from Mastercard. This is just in alpha in 3 months with 200? users.
[+] [-] trumbitta2|10 years ago|reply
This guy, famous for singing "Il Mondo": https://www.youtube.com/watch?v=0SGE8H4R9XA
[+] [-] anthonybsd|10 years ago|reply
[+] [-] philefstat|10 years ago|reply
[+] [-] shawabawa3|10 years ago|reply
I'm not sure if there are any other UK based online banks, I couldn't find any in 30seconds of googling
[+] [-] kjjw|10 years ago|reply
[+] [-] manuelflara|10 years ago|reply
[+] [-] lowpro|10 years ago|reply
At finished at 1:02, and was put on the waiting list. Needless to say I was a bit angry I was less than a minute away.
[+] [-] anc84|10 years ago|reply
[+] [-] hawaiikaos|10 years ago|reply
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] krmmalik|10 years ago|reply
[+] [-] neximo4|10 years ago|reply
> https://register.fca.org.uk/ShPo_firmdetailsPage?id=001b0000...
Mondo will offer banking services (lending via OD)
[+] [-] rgovind|10 years ago|reply
[+] [-] cmdkeen|10 years ago|reply
Mondo is in the process of registering as a bank.
[+] [-] superuser2|10 years ago|reply
[+] [-] dmoy|10 years ago|reply
[+] [-] akhatri_aus|10 years ago|reply
[+] [-] throwaway34938|10 years ago|reply
[deleted]
[+] [-] throwaway34938|10 years ago|reply
[deleted]