Monument Bank has received regulatory approval this week to operate under a restricted license receiving a green light from the Financial Conduct Authority and Prudential Regulation Authority. Monument Bank seeks to cater to the affluent providing a service that is just a click away as a digital challenger. The platform is not yet live but expects to launch in early 2021. According to its website, Monument Bank clarifies its mission:
“We believe there is a poorly served community which deserves far more than they currently experience from their banks. These people work hard for their success, and appreciate everything it enables them to do and become. Their loyalty is taken for granted rather than rewarded. Until now, rarely receiving the service they deserve.”
The Fintech boasts a top shelf of executives managing the bank with CEO and founder Mintoo Bhandari previously working at Apollo Global Management. The Chairman of the Board is Niall Booker who was previously CEO of HSBC and led the turnaround of The Co-Operative Bank.
Monument Bank joins a growing roster of digital banks in the UK but with a twist as it targets a segment of the market that has yet to see much interest from the Fintech sector. Monument Bank looks to challenge establishment firms like Coutts and the approximately 3.5 million wealthy individuals that appreciate a more bespoke service. The mass affluent sector is described as professionals that sit between the ultra-high net worth and typical retail banking customer.
According to a report in Sky News, now that Monument Bank has a provisional license it expects to raise considerably more than its previous £10 million funding round from this past summer. The report states that “a number of blue-chip investors [are] said to have agreed to participate.”
Monument says it is building its bank from the ground up with “modern technology at its core.”
In August, Bhandari wrote that “the mass affluent market is unloved and underserved by banks.” Bhandari explained:
“Whilst COVID-19 has further highlighted the inability of banks to serve the affluent market – those doctors, lawyers, accountants, entrepreneurs and investors with a net worth of between £250,000 and £5 million – this phenomenon is not new. While building its business over the last 18 months Monument conducted multiple surveys, interviewing over 1,800 people in the mass affluent demographic. And one of those surveys revealed that 93% of respondents expressed dissatisfaction with their current banking provider. The conclusions from the research were that there is a clear opportunity for a new provider who genuinely understands this segment, values its members’ time, and appreciates what they have achieved whilst acknowledging and supporting their ambitions.”
The target market is said to be worth “over £200 billion in total in cash, and 100 million globally with an estimated £80 trillion combined net wealth.”
So should Revolut, Monzo, etc., be nervous? Probably not. Monument is not looking to serve the mass market, which is where all the other digital banks have set their sweet spot – but the select few. It will be interesting to see how Monument Bank differentiates its product from both the old guard and the Fintech upstarts and the features and services the digital bank will offer – but we will have to wait until next year.
