The UK's challenger banks keep growing in popularity. And with their increased size comes pressure to add new features – many of which are similar to those of the legacy banks they're replacing. Now, in an effort to encourage people to get their wages paid into its own current accounts, Monzo is adding two new tools to help people save more efficiently.
"We didn’t set out to just be a great spending card," product designer Simon Amor wrote in a Monzo blog post. Instead, the new additions are designed to stop people "needing to faff around with different bank accounts". In short: spend more time, and keep more money, within Monzo.
The two tools coming to the fintech firm's app are in the form of a salary sorter and bills pots. Both have the purpose of helping people split money across their account. The aim? To better organise money.
The sorter can be used when a salary (or any other regular payment above £100) is made into an account. It works by giving the option – in both personal and joint accounts – to split regular income into different sections. "That might mean a chunk going into a Savings Pot, some into a Pot for bills, and the rest left in your main balance to spend," Amor writes.
For instance, if a payment of £1,500 was received, Monzo allows this to be added to pre-defined sections: £500 could be transferred to savings, another £500 to a general spending, and the remainder to a bills section. The company says it will remember preferences the next time the same payment is made; in future it has the ambition of automating the split.
The move from Monzo is designed to encourage more people to get regular payments, including wages, paid into their accounts – rather than those of traditional banks. Challenger bank rival Starling, while having vastly fewer customers than Monzo (800,000 to its three million) has said it has more than a billion pounds deposited to it and on average customers deposit an average £1,450 a month into their accounts. The figure is comparable to legacy banks and suggest it is used for day-to-day banking, rather than as a spending card.
Read more: The best Monzo hacks and hidden features to make saving suck less
Monzo's second new feature is focussed around bills. Its bill pots allow customers to add scheduled payments (think direct debits and standing orders, such as rent) to one individual section. This separates money from general spending amounts in a main current account. "When the bill’s due, we automatically move enough money from your Pot into your main account and then pay it for you," Amor writes.
At the point of introduction, the company says customers have to manually add money into the bills pot to make sure there's enough in there to cover outgoing payments but in future it wants to make the process automatic. (It also wants to add support for subscriptions such as Netflix). If not enough money is in an account the day before a payment is due, the company will send a notification alerting the user. "One day we’d like to make the process of topping up your Bills Pots automatic, so you never have to worry about it at all," Amor writes.
The new additions to the Monzo app come as the company has scrapped its premium packaged accounts for new customers. Monzo Plus, which included travel insurance and travel money, was designed as a way to help the firm reach profitability and cost customers a varying monthly fee.
However as customers appeared to be unhappy with the service the, firm has decided to re-think its subscription. "We’ve decided to go one step further and start from the very beginning," staff wrote on its community forums.
If you're looking to move to a challenger bank but aren't sure which, let us help. Check out our guides to all the services for in-depth analysis: Monzo review, Revolut review, N26 review and Starling Bank review
This article was originally published by WIRED UK
