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Money should 'just work' – interview with Monzo Bank

Friday 31 May 2019 | 08:26 AM CET

During MoneyLive Madrid, The Paypers sat with Kieran McHugh, Backend Engineer at Monzo Bank, to talk about best practices in open banking and more

Could you share with our readers what is Monzo, the idea that triggered the foundation of the bank and the problems in the financial industry it is striving to solve?

Monzo is a bank that lives in your phone. We were founded in the UK in 2015. Since then, we've grown to over 800 staff members and 2 million customers. We're onboarding more than 35,000 new customers every week – making us the fastest growing bank in the UK.

Monzo was really founded on the principle that your money should ‘just work’. It should be easy to access, easy to understand and visible in one place. We believe that banking services should be available to everybody — including if you've been in debt, if you've just arrived in the country, or you've had a tough time in life.

We're trying to put a stop to exorbitant unfair fees being the norm. We are striving to provide world-class customer support. We're focusing on solving real problems, rather than just offering a suite of financial products.

In 2018, Monzo Bank partnered with the world’s largest automation platform, IFTTT (If This Then That). What does this mean for your customers?

In my conference talk, I really focussed on how exciting Open Banking and banking APIs are. I also spoke about the risk that we'll miss out on a huge number of innovative open banking use cases because they don't represent commercially viable business models in their own right: being an AISP or a PISP is expensive.

Our integration with IFTTT brings the power of automation to individuals, even if they don't know how to code. It lets each customer set up 'applets' on their account – powerful mini-programs to do things like automatic saving when it rains outside, giving yourself a reward when you go to the gym, or charging yourself a 'tax' whenever you buy fast food. It gives our customers more control over their money.

Congrats for such an insightful presentation on open banking during MoneyLive conference. In your opinion, what is hindering banks from making open banking a success?

In short, I think Open Banking has been a success. It hasn't been around for too long, but we're already seeing some super compelling use cases that are legitimately making people's lives easier. It's important to remember that we tend to overestimate the potential of new technologies in the short term, and underestimate their potential in the long term.

That being said, I think technology is hard for banks. Banks often prioritise stability over everything, so implementing changes to the spec or new Open Banking initiatives takes a long time, and a lot of money. As more third-party services become reliant on Open Banking APIs, customers will naturally migrate over time to the banks that have the fastest, most featureful services. I think we have a lot to be optimistic about.

What are the key aspects of making digital transformation safe and secure?

Monzo is really a technology startup at heart. It's common in this industry to hear people say things like ‘move fast and break things’ as a sort of call-to-action: encouraging people to be brave and to do things that make them uncomfortable in pursuit of innovation. This isn't really helpful advice for Monzo, though. We have to move fast, but we need to do so in control.

Banking software can be incredibly complex, and it's really important that engineers have a full, clear, and detailed understanding of how the systems work. Monzo achieves this by dividing our platform into over one thousand different microservices, each with its own purpose. It's so helpful to break down systems into logical chunks that are easy to understand and reason about. Many legacy banking systems still run on ancient software in arcane programming languages like COBOL. These systems are fundamentally problematic: they are the product of decades of patchwork, they don't enjoy the latest security updates and patches, and incredibly few people understand how to fix them if they break. Digital transformation is changing that.

Robust change control is also important in keeping digital transformation safe. Monzo engineers like me ship new software to production 50 to 100 times per day. These are small, incremental, well-considered changes. We have detailed real-time metrics on every change we make. If something doesn't look quite right, we can roll back the change instantly and investigate the issue. This contrasts starkly with the approach taken by many older banks, who tend to batch their changes into one (very risky) monthly or quarterly software update. The traditional approach has led to severe banking outages in the UK spanning multiple days.

Digital transformation opens up so many new possibilities to make banking safer and more secure. At MoneyLIVE, my colleague Natasha, Head of Financial Crime, gave an amazing talk on how the in-house technology we've built enables us to fight fraud in entirely novel ways. By building our systems in-house, we've got full flexibility to make careful, deliberate design decisions to protect our customers. For example, our login process doesn't rely on passwords – which reduces the risk that somebody will ever fall victim to a phishing attack.

What’s in store for Monzo Bank in 2019?

A lot! Broadly speaking, Monzo is really focussing on growth. We've just launched our first nationwide TV advertising campaign, and our second nationwide billboard campaign. We're on course to exceed 3 million customers by the end of the year. It's hugely exciting and humbling for the whole team.

We're also introducing a whole host of new product features to help us realise our vision of becoming an amazing financial control centre. For example, my team, Financial Hub, has been working to let our customers link their credit cards, other current accounts, mortgages, savings, and other financial products with Monzo so they can see and manage all of their money in one place. We'd like to go further by letting our people use great Monzo features like bill splitting and Shared Tabs with third-party accounts as well.

I'm really looking forward to our first annual investor meet-up. More than 500 of our crowdfunding investors will descend on our headquarters in London for a day of announcements, presentations, and office hours with Monzo staff. We're so fortunate to have supportive customers cheering us on every step of the way.

About Kieran McHugh

Kieran McHugh is a Backend Engineer at Monzo Bank and technical lead for the Financial Hub team, based in London, UK. He spends most of his time coding and coaching other engineers. Kieran was also the lead engineer on Monzo's integration with IFTTT.