Mondo, a digital-only bank, has received a banking licence to add further competition to the challenger bank market that already includes Atom, Tandem and Starling.
Mondo is now officially a bank in the UK and is authorised and regulated by Financial Conduct Authority and Prudential Regulation Authority.
The bank said the announcement means they now have a banking licence with restrictions.
“We now enter the ‘mobilisation’ phase and over the coming months will be working with the regulators to get our restrictions lifted and launch a full current account with debit cards, faster payments, direct debits and everything else you’d expect.”
It also said that it will continue to distribute the Mondo Beta cards and develop the Mondo app to make it ready for transition into a bank account in early 2017.
Analysis
It’s not a bad time to be a mobile bank. According to recent research from the British Bankers’ Association (BBA), mobile banking in the UK being described as a “consumer-led revolution” with customers are using banking apps on smartphones 7,610 times every minute – or four billion times a year.
This rise in mobile-based banking is happening phone banking and physical branch banking is decreasing. In fact, the amount of phone banking transactions is dropping by 1o million every five years.
Not even the uncertainty over the UK’s efforts to extricate itself from the EU seems to be worrying challenger banks. Ninety percent of the PwC ‘s Authorisation and Start up Unit’s clients that were planning to set up a new financial services firm in the UK before Brexit are still going ahead despite the result.
To top it all off, the Competition and Markets Authority (CMA)’s new package of measures, which is designed to boost competition and thereby provide a better deal for customers in the UK, will require retail banks to provide information that will make it easier for customers to switch bank accounts for a better deal.
The CMA said the measures will make big banks work harder for their customers and will also ensure that new entrants and smaller players can compete more fairly.
However, it is still very early days and challenger banks have to prove that they can attract and protect customers’ interests in the long-term.
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How did you first start working together?
MK: At the end of my first week at business school INSEAD in 2003 there was a dinner and I sat next to two people who ended up being pretty important in my life: the guy on the right was American, talked fast and probably a bit too loudly and that was Ricky. The person on my left was beautiful and English and became my wife Sophie. In 2005 Ricky and I decided to formalise our relationship and friendship, looked at some business opportunities and consolidated them into Hexagon Partners.
See full transcript here.
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