Monzo expands into mobile services

Monzo weighs launching a digital SIM card and its own mobile contracts in the UK to broaden revenue and sharpen competition with legacy networks.

Monzo plans UK mobile service to diversify revenues

Monzo is exploring a digital SIM card and the idea of offering its own mobile service in the UK. The fintech says it is in the early stages of developing this concept and wants to apply the Monzo way to a mobile contract product. If successful it could add another revenue stream and put pressure on incumbents such as Vodafone, Three and EE. The move follows Monzo growth to more than 13 million UK customers and a staff base above 3,900, with an eye on a future IPO. The company has secured a banking licence and has attracted strong investor interest, even as it faces regulatory headwinds. The Financial Times reported the plan, and Monzo has faced a £21m fine from the FCA over weak financial crime controls which the company says is now resolved. The FCA findings highlighted that customers could register with implausible addresses including 10 Downing Street and Buckingham Palace. Chief executive TS Anil said the fine marks the past and that changes have been made to governance and controls.

This move tests whether a bank can successfully operate in a sector that relies on spectrum and network agreements. If Monzo can strike favorable terms with networks and deliver simple pricing it could force the big operators to rethink bundles and fees. The bigger risk is trust after the FCA fine and the scale of regulatory scrutiny fintechs now face as they expand into new lines of business. Investors will weigh growth against governance and the ability to manage cross sector operations without duplication of risk.

Highlights

The next year will show whether Monzo can turn app strength into a lasting platform