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I find it hard to believe that they struggle to make money off bank accounts. It's an intentional top of funnel strategy to offer free accounts.

• Nextgrid 4y ago
  > I find it hard to believe that they struggle to make money off bank accounts. Why is that? Current accounts are a loss-leader for most (all?) legacy banks too, they're used to lure the customer in so they can then pitch revenue-generating products such as credit cards or mortgages.
• 55555 4y ago
  Go look up how much money they have in deposits. When I checked in 2017/18 they had like 87mm USD total. That’s a single UHNW account at a “real” bank. Maybe it would earn 1-2mm in annual profits from AUM to cover a dozen staff? Idk I’m not an expert.
  • ascorbic 4y ago
    £4.4 billion in Feb, so about 6bn USD. https://www.statista.com/statistics/1118161/customer-loans-and-deposits-for-monzo-bank-united-kingdom/ https://www.statista.com/statistics/1118161/customer-loans-a...
• danpalmer 4y ago
  UK banks work to an expectation of 0-3% margin. In Monzo's favour is that they don't have to operate a branch network, but then again they are small compared to the high street banks. There's just not a lot of money available in accounts, even accounting for using it for lending etc. Also bear in mind that while they can use deposits to fund some amount of lending, the amount they have to keep on hand, collateral, insurance (not sure if it's called that) with the Bank of England, etc, are all very heavily regulated so that they can't mess it up, which conversely means it's much harder to monetise than expected based on a basic understanding of fractional reserve banking.