The hottest little bank in town is an app called Mondo
We sat down with Tom Blomfield, co-founder and CEO of mobile-only bank Mondo, to talk about banking in the age of a life lived on your smartphone.
Mobile-only bank Mondo is a young company, even in startup terms: Tom Blomfield and his four co-founders have only been at it since February. Intrigued by a few tweets and blog posts hinting at what’s in the works, I asked Blomfield for an interview, and to my surprise he accepted. Because what can there really be to talk about this soon? Is it even possible to build a bank in five months?
The answer to this question is yes – the app is up and running, and the first Mondo debit cards have been issued. But the answer is also no, as Mondo is very much a work in progress: the app changes daily. “We’ve built a core banking system!” says Blomfield. “We have our own service and infrastructure, and the app runs on top.” This do-it-yourself approach means there’s plenty of freedom in building Mondo: this bank can go in any direction dreamt up by Blomfield and his team of merry coders.
The CEO and I are sitting on the roof of White Bear Yard, Passion Capital’s buzzy co-working space in Clerkenwell. Passion provided the “low millions” seed funding for Mondo in April, although Blomfield reckons it will take a couple of years and £15 million to get Mondo fully up and running. “We’re not even perfecting Mondo, we’re still very much building,” says Blomfield. “One thing we really believe in as a company, is being very transparent and close to our customers. We don’t want to go away and hide for two years before saying: ‘Here’s what we’ve built, does anyone like it?’ Instead we’re really open.”
It makes sense: a mobile-only current account bank for the smartphone generation begs an interactive process. “We’re trying to provide a bank account for the kind of people who live their life on their smartphones, and get angry when stuff takes more than five seconds. Like me, basically!” Blomfield laughs. But it’s right on trend: the people used to Uber rocking up within minutes, and same-day deliveries from Amazon, aren’t going to want to queue in a bank branch.
Blomfield opens the Mondo app on his iPhone. “My balance is 300-odd quid,” he says; for now, the Mondo debit cards have to be pre-loaded with cash. “You can see I bought my breakfast at Pret,” he says, as transactions are updated in real time. Blomfield taps it: there’s Pret on a map, and the tag #breakfast. “Or you can use the tag #expenses and then click ‘export’, immediately generating an expense report, with no work.”
There’s more: if you forget to touch out with your Oyster card, Mondo will invite you complete the journey on TfL’s website and avoid the fine. If your electricity bill is higher than usual, the app will invite you to investigate with a call to customer services. You can cash in your loyalty points right there in the app – the examples go on. “You start with all the basic data: what you spend, where, with which merchant. Then you move on to insights, some sort of learning. But the third step no one has got to, is action. Because we’re building a full bank, we can actually let people take action. That’s where the internet is really going.”
Blomfield’s enthusiasm for Mondo is infectious. I eye the app jealously: my bank’s app doesn’t do any of this stuff. A mobile-only bank was bound to be fun, with features like adding emoji to transaction fields, but this looks like it could actually be really useful. This bank would be less a walled garden, and more a financial hub with direct ties to the rest of your life. It turns out my reaction is pretty normal to seeing the app: “It’s often: ‘When can I have it!’” Blomfield laughs.
The banking community is starting to be won over too, now that Blomfield has a working app to show them: “Before we had the app, the reaction was very much things like: ‘Current account banking is just a commodity!’ ‘No one will switch accounts, it’s not interesting!’ And then we showed them the app and now the reaction is: ‘Oh s**t.’” Blomfield laughs again. But the reaction demonstrates the radical nature of the Mondo proposition, as a current account has always been a static place. “We’ve put a whole level of intelligence on top of it. And they say: ‘Oh my god. This is what people have been talking about for 15 years.’”
So if this idea has been knocking about for a decade, how come it’s not been done? This is a complicated issue, says Blomfield, whose team of co-founders include alumni from Allied Irish Bank and ABN Amro UK. There’s no shortage of innovation teams at the established financial groups, and they’ll come up with crazier things than Mondo: “But they are structurally unable to deliver it.” One reason is cultural: “[Established banks] don’t have a culture of regularly building and shipping features.” Then there’s the fact that many banks operate with off-the-shelf software, which, argues Blomfield, provides limited abilities for customisation. “Then there’s the old legacy banks out there who have decades of accumulated technical debt. Their systems are like Frankenstein’s Monster! … We’re different because we have a team of engineers sitting downstairs who actually write code, every day.”
Mondo is currently halfway through its banking licence application. The hope is to have a license with restrictions in about six months’ time, and a full launch sometime after that, probably in about a year. “But we have a working system, and we’re going to roll out debit cards to a few thousand people this summer. It will be based on our technology, but in the short term we’ll be partnering with another bank to provide the license.”
If all this sounds ambitious, it’s worth noting this isn’t Blomfield’s first time at the rodeo. The 29-year-old started and sold his first company, Boso, while reading law at Oxford. He then grew his second financial startup, GoCardless, to a company processing $200 million low-cost direct debit transactions annually. So what’s it like, doing this again with the added experience?
“It lets you be more ambitious,” says Blomfield, referring to how he worked with Passion Capital for several years at GoCardless. This meant his bold plans to launch a brand new bank were actually given the time of day: “Instead of saying: ‘Get the hell out!’, they said: ‘Okay, that’s interesting. Tell us more.’ … It feels like a step up in terms of ambition. It feels like this is the big one.”
He has a point: after starting a bank, how can you top that? “I can see myself spending a good proportion of my life on this, if it goes well. But it feels like this has been a long time coming: banking is so fundamentally broken. It hasn’t changed in 30, 40 years.” There are potential problems ahead for Mondo of course, but not the ones “traditional” bankers see: “The technology and licensing are serious undertakings, but they are pretty well known. Making something people really want is the biggest challenge, for any start-up,” says Blomfield. “You only really know by getting [the product] into their hands and seeing their reaction.” And Mondo won’t be for everyone: lots of people like having a branch. But this isn’t for them: “This is a bank for people who live their lives on their phones and hate waiting for anything. And if that means only addressing a third of the population, that’s fine: that a lot of people!”
That could actually end up proving a conservative target market for Mondo, judging from figures from the British Bankers’ Association: mobile banking has eclipsed not just branch-based banking, but also web banking, this year. Having said that, there’s no doubt that Blomfield is fully aware of the blue-sky potential for Mondo: “I think banks have an extinction event on their horizon. I want to be building the kind of company that replaces them!” He laughs again, but you can tell he’s serious. “I love technology. I love the way it can just make everyday life much, much better. … Sometimes it feels like we’re living in science fiction. It’s incredibly exciting.”