With the competition so close, Starling decided to frost all of its windows. “It’s true,” says Boden, laughing. “But now they’ve moved up the road”.
The competitiveness is not surprising given that the potential rewards are huge. Coronavirus has accelerated the shift away from branches and towards online banking and Boden says this could create opportunities. “Trying to find things for branches to do is a bad idea,” she says, addressing a problem facing the high street lenders she’s trying to compete with.
“The banks need to get together to share branches. You don’t need a branch from every bank in every town. People are not using debit cards; they’re using mobile wallets. We did really well on new account opening during lockdown as people didn’t go into a branch”.
Bank bosses have long been trying to grapple with this shift in behaviour. Senior executives from taxpayer-backed lender NatWest Group approached Monzo for informal talks about a takeover around three years ago, highlighting how seriously major rivals take the threat posed by these players even before they’ve turned a profit.
After executives baulked at the suggested price tag, they decided to launch their own rival product. The attitude of some inside NatWest at the time was that there were 42 million people in the UK without Monzo, so why give the fintechs a “free run”?
But mimicking the success of these start-ups proved trickier than expected and six months after launching its product, Bó, the bank shut it.
Boden, a veteran of the banking industry who has worked at NatWest, Allied Irish Banks, Lloyds Bank and UBS, has no doubt received similar approaches from the large banks, but has her eye on a future stock market listing instead.