Monzo has emerged as the latest fintech favourite to broaden its lifestyle offerings, with the company exploring the creation of mobile phone services.
The London-headquartered business is examining the possibility of providing a Monzo-branded service to its more than 12 million account holders, as reported by .
This initiative would mirror competitor Revolut's announcement in April regarding its entry into the mobile market, alongside buy now, pay later behemoth Klarna's launch of its US phone plan in June.
READ MORE: {}
A Monzo spokesperson commented: "Monzo is known for transforming products – and an entire industry – to deliver a great experience for customers.
"So when we heard from our customers that mobile contracts can be a pain point, we set out to explore how we could do this the Monzo way."
Fintechs battle to diversify
Monzo's latest strategy, initially disclosed by Financial Times, emerges as 海角视频 fintechs endeavour to broaden their revenue channels against a backdrop of declining interest rates.
The Bank of England reduced rates to four per cent this month, falling from a post-financial crisis peak of 5.25 per cent last August.
Interest earnings at Monzo climbed beyond £500m within two years, capitalising on elevated interest rates.
Most Read
However, whilst rates aren't anticipated to return to pre-2022 levels, the gradual reduction is poised to impact the company's profitability.
The digital lender revealed last year that every 100 basis point movement in rates affects annual interest earnings by £34m – equivalent to eight per cent for the period concluding March 2024. Monzo's revenue saw a 48 per cent surge to £1.2bn in the past year, with customer deposits ballooning nearly 50 per cent to £16.6bn.
In July, the digital bank was hit with a hefty £21m penalty by the Financial Conduct Authority for "repeatedly" opening accounts for "high-risk" customers, including those registered at notable landmarks like Buckingham Palace and 10 Downing Street.
Chief Executive TS Anail assured that such issues have been "resolved and are firmly in the past."