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Comment by ultimatejman | Hacker News Reader

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.

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> UK banks are slow to innovate

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.

> I hardly think the UK banks aren't innovators.

I did not say they were not innovative at all. I said they were slow to innovate. This is being proven by the speed at which fintech startups are unbundling banking services into individual products.

Zopa, Nutmeg, Transferwise could have been built by banks. But they were not.

> Instant, Free transfers, including from one bank to another. Even on weekends & holidays.

- Paypal in 1999?

> APIs currently available (under the UK open banking government guidelines)

Yodlee supplies APIs already.

> they already have roughly £15k in the bank from Acq Bank revenue from Mastercard.

Really? Mondo are currently paying for the prepaid cards, and more to load them through the app. This is probably around 2% ? So 20k cost for this? Maybe I am wrong, but I can't see how else the card gets loaded by a free payment.

You are right, the barclays accelerator is great. And similar incubators and schemes are opening up.

I still think it's pretty clear that innovation is coming from the outside.

>- Paypal in 1999?

Whaaa? The paypal-to-paypal part is instant. Getting the money into a US bank account usually is not. It's still the case in the US that there is no easy and reliable way to instantly get money that's in your account to appear in your friend's account. (There are some instant transfer services, but they don't work between any two US bank accounts.)

- Paypal in 1999?

Didn't know they were free in 1999. It doesn't look like banks will start charging for transfers though, it's certainly not free to get customers. It can also be withdrawn as cash immediately as its received ;), even today Paypal takes a bit of time to withdraw outside of the UK.

> Nutmeg

Not easy to do as it has to be a seperate entity. Im working on a startup like Nutmeg. Also the 2008 landscape changes in what Banks want to be makes them avoid this space. Investments are a bit investment bankingey for the ordinary person.

> Transferwise

These eat into their margins, why would they do that? They already have customers willing to pay more. Transferwise can't get everyone as an audience that most banks serve, though it will get some of them.

> Zopa

Banks are apparently participating in these marketplaces. Granted they haven't created any marketplaces, though.

> Yodlee supplies APIs already

The bank's API allows transfers, takes 1 second and doesn't need a username or password. No need for those token things either. Yodlee's big problem is they screen scrape (or use the banking api the bank provides which you can get without paying) and it can take up to 5 mins to do this.

They use OAuth so its like the 'login with facebook' type authentication where the authentication is delegated back to the bank.

Banks do innovate but they're interested in things that improve banking and focusing on that. They're not interested in the old pre 2008 model of banking.

Yeah thinking about the 1.5% fee thing they probably don't have that because its routed through Wirecard (German firm) and they've just put mondo branding on it.

I hardly think the banks are slow. I've lived in Australia, South Africa & Canada. By any measure the UK banks (except a few) are really quick in adapting to change. If ours are slow the ones there are Glacial.

I guess if you look at Fintech in breadth, the big players aren't interested in doing everything, just a handful of small things really well and very profitably. It's a bit harsh to say they're not doing enough faster by judging them against non banking startups.

I guess it seems like alot of these services are unbundling banks but it's just a handful like Transferwise. The 'core' banking features are hard to unbundle. I guess P2P lending is sort of a unbundle in a way but its at a different vertical.

To put it another way I guess: What are UK banks missing that is available elsewhere that would improve banking services (besides customer support), or even more generally?

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