Monzo CEO Tom Blomfield believes that big traditional banks are killing the changes that ambitious companies are trying to bring to the fintech industry.
The CEO and co-founder of Monzo Bank Ltd, a financial institution based in the United Kingdom, Tom Blomfield, has stated that big banks are set up to prevent fintech change. He also claimed that they are hunting out change and attempting to kill it.
The British fintech entrepreneur does not believe big banks will ever experience a digital transformation. According to him, the banking heavyweights are saddled with outdated technology and a risk-averse culture, which is designed to fend off change owing to their approach to tackling the threat of rising competition.
Blomfield sheds more light on his words by adding that fintech giants such as Barclays and HSBC are utilizing outdated technology and a risk-averse culture to counter the challenge presented by upstarts like his digital bank Monzo.
“The banks really focus very hard on their existing set of financial products,” Tom Blomfield said during an interview, making reference to things like mortgages, loans and credit cards – “balance sheet products, basically.”
He explained:
“When you go out on the street and talk to people about their banking, they don’t mean their mortgage, they mean, ‘When am I going to get paid?’ or, ’Can I afford to buy lunch today?’. Human beings mostly focus on day-to-day payment processing.”
The Monzo CEO provided clarity on his statement that the financial juggernauts are acting as anti-change factors, stating that their approach to rising competitors is mainly to “spin out a part of the institution and send them off into a trendy office with exposed brickwork, Converse and Ping-Pong tables”.
He also stated:
“Banks are set up to prevent change basically. A lot of the systems inside the bank — particularly risk and compliance functions — are there to stop things changing. Because if things change it creates risk. And so they’re like these antibodies that go around hunting out change and trying to kill it.”
Monzo has been on a steady rise since it was established in 2015. It has developed from a start-up offering prepaid debit cards and an app to a regulated bank that has successfully pulled in over 3.5 million users in less than five years. On June 26, 2018, the company partnered with TransferWise to offer cross-border transfers that would allow users to send funds from their current account to 16 of the most popular currencies in the world.
Meanwhile, the United Kingdom has become the top destination for European fintech investment following a 38% rise year on year that hit $4.9 billion, Coinspeaker reported on January 30, 2020.
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