Mondo — what a great name, right? Well, kiss it goodbye. The U.K.-based mobile bank, which was granted a limited banking license this week, will announce a new name next week, CEO Tom Blomfield told Bank Innovation.
Mondo has made a name for itself (even if it’s going to change) by offering emojis for peer-to-peer payments, as well as extensive feedback and notifications around payments. It also doesn’t hurt that Blomfield is the youngest-ever bank CEO in the U.K. — he’s 30 years old.
The neobank, or challenger bank as they are called in the U.K., is one of several to have been granted licenses recently. The others include Tandem, Atom, and Starling. Mondo’s license is restricted. It can only hold £50,000 in deposits, and will be audited while it builds out its IT systems, which Blomfield said included links to payments rails as well as core components.
Mondo has a waiting list of some 200,000 people and has released a prepaid card in partnership with Wirecard. “We’re testing out the ideas we want to build out as a full bank,” said Blomfield, who was also a founder of the startup GoCardless, a provider of direct debit payments to businesses.
The regulatory process to get to this stage took about two years, Blomfield said. The first five or six months involved submitting some 10 thousand pages of material. “It’s six to nine months of work before you can apply,” Blomfield said. “The regulators want to make sure your bank is viable and sustainable,” he said. That means the business model is sound and it can be demonstrated that customers want to join the bank. Banks are required to have about £20 million on hand, only a portion of which is capital reserves. Before 2011 the figure was £100 million.
The license is necessary to accomplish what Mondo wants to accomplish, Blomfield said. “When you’re building a skin on an existing bank, you’re limited by legacy technology, and the bank’s internal compliance, risk, and legal teams, so you can end up being stifled.” As to why existing banks are not serving customer needs, Blomfiled said, “They’re a bit blinkered. They’re focused on products and selling mortgages and credit cards. It’s P&L, not serving the customers’ needs. Saving up for your wedding is a customer need, but there is no product for that. Filing your taxes is not a financial product.”
Mondo, Blomfiled said, will “make it all work in a delightful way, no flogging lots of products.” The bank is funded by Passion Capital, whose fintech lead, Eileen Burbidge, is a passionate advocate of Mondo.
As to that name. It seems “Mondo” violated a trademark — it’s not clear whose, exactly — so the bank-to-be put out a call to its customers and received 13,000 submissions in the first 48 hours. A rule of submitting was that the idea had to begin with the letter “M.” Blomfield said the bank’s officers narrowed the choices down to 3 or 4 contenders, and now has found the right one, which will be announced next week. But first there are domain names and social media handles to be secured.Like This Post