Today, Monzo, a digital bank, is set to launch its first business accounts. The announcement comes as the loss-making challenger tries to look for a more efficient way to generate revenue.
The bank will open a waitlist that will initially accept only the first 100 applicants into beta testing. Monzo said that it is hoping to fully launch accounts for small businesses by the end of the year.
Currently, it is waiting for the outcome of allocations from the £775 million RBS Remedies Fund, of which Monzo is shortlisted to win a slice.
The bank reported a loss amounting to £33.1 million in 2017, however, business account sizes could enable it to substantially increase its revenues. Fintech banks such as Monzo have been concentrating on getting customers to put salaries into their account every month, in order to generate increased revenue by being able to lend out larger sums.
Tom Blomfield, the chief executive of the company, said that the current business banking system is “broken.” He added that firms find it takes too long to open accounts and understand the complex fee systems set by banks.
The launch comes after Blomfield took to Twitter last January in an attempt to source ideas from the wider community on how to improve the firm, with business accounts being apparently the most popular opinion.
Even though the personal current accounts of Monzo come with no fees, it was reported by the Sunday Times that users of the business account will face a small charge.
A company blog post regarding the news stated: “Over the past few weeks, we’ve spent lots of time talking to small business owners, reading your comments on the community forum, and understanding what you expect from a business account.”
It added: “Your feedback made it clear that business banking is broken. Your existing business account isn’t meeting your needs.”
Monzo was able to raise more than £100 million in a large funding round late last year and is valued at more than £1 billion.