Banking services are essentially a commodity- so long as it works no one is too bothered who deals with your transactional banking. In the first of a two-part series, Maddy Christopher monitors what’s brewing at Revolut, Starling Bank and Monzo. “If you look at the unicorn valuations of these companies, they are pricing on a per user basis valuation somewhere like $1,000…in enterprise value per user. And with 98% of Monzo’s deposits (£1.4bn) remaining untouched, there is some evidence to support Levine’s optimistic assessment. Starling Bank. 17 August 2020, By Isabel Woodford Revolut also charges an ATM withdrawal fee of 2%. Starling leads here, pulling in £999 per user at the last count; largely due to its headstart in business banking, where deposits tend to be larger. But you don’t hear too much about their banking as a service revenue stream, which results in them selling payment services to other fintechs,” he added. Still, beyond these shared trends, it’s worth comparing how the three fintechs — Monzo, Revolut and Starling — performed in relation to one another. By dividing revenue by the average number of customers in the year, you can get a rough estimate for how much each user generated in 2019. “We’re doing really well financially, and it’s a horrible thing to say, but the crisis has given us the opportunity to focus on getting new products out and consolidating our position,” commented Boden. By comparison, Virgin Money, one of the previous crop of “challenger” banks, has around £64bn in customer deposits; and Metro Bank has customer deposits of £14.5bn. Rumours suggest that Revolut may make more redundancies to tighten the purse strings. To add salt to the wound, Monzo co-founder Tom Blomfield resigned as director weeks after stepping down as CEO. I opened business and personal accounts with Revolut and my first impressions were very favourable. Because the future isn’t where you expected, By Isabel Woodford Unlike it's digital competitor Starling, Monzo started life as a pre-pay travel. Sifted also asked analysts and venture capitalists to share their top takeaways from the annual results. “Starling has excelled in growing its business banking category and has been particularly successful in helping the government administer Covid loan schemes,” said Levine. 1. Note; the reports do not make clear how much the banks actually had in realised losses from loan defaults. Terms apply to the offers listed on this page. If you’ve followed me for any length of time you will probably know that I am a huge fan of Starling vs Monzo. Interesting article, but some points I’m not sure about: 1. Starling’s loan book has grown from £100m in November 2019 to over £1bn in July 2020, and has it has approved £903.1m in government-backed loans. Revolut is the cheapest option since it’s mostly free. Still, Starling says its lending book has already grown rapidly in the financial year of 2020, thanks to its role in deploying government-backed loans. This is a vast improvement from the net loss per account of £15 they recorded in 2018. Two factors of focus for this comparison: Offered Functionality; Offered UX For those wishing to earn something, Monzo and Starling offer both interests with their current account. However, Starling’s marketplace model seems to have had disappointing results, bringing in just £72,000 in commission from connecting users to third party apps. Starling -v- Revolut £-€ quick comparison. Startup Europe. Still, one important point of comparison for Starling, Monzo and Revolut is how much money users deposit on average. 11. For more information on Revolut's business account read our Revolut Business bank account review. Help Sifted get bigger and better (and get a sneak peak at our future plans). Meanwhile, Monzo has now lost one of its key revenue sources, after regulators stepped in to stop them charging a steep 50p daily fee for unplanned overdrafts. In this post, you can find a table that compares Revolut vs Monese vs Monzo vs Starling vs Pockit. Meanwhile, Revolut has dropped from having an average deposit of £252 per user in 2018, to £236. The neobank has yet to furlough an employee, instead, hiring 147 since lockdown in March. “Starling has a different demographic, our customers tend to be more affluent and older,” said Boden. Enter your email address and get our weekly newsletter. Starling is also technically acquiring customers the fastest in the UK, when adjusting for its age, as shown in the graph below. Digital banks also still seem to be grappling with how to seriously monetise current accounts — often dubbed the “low hanging fruit” of banking — and it remains to be seen whether their business models can confidently ride out the coronavirus. Mostly, it's about credit. Monzo’s revenue grew by 241% year-on-year, while its cost-base increased by only 159%. Everyone knows the saying "turnover is vanity, profit is sanity" to which I add "and cash is king". CEO Nikolay Storonsky focuses on measures other than profit and loss, however, and claimed in a recent statement: “While we still have some way to go, we are pleased with our progress in 2019. That's fine up to a point if they are just taking MLR seriously but when you can't speak to someone just react to an App that tells you the security checks are ongoing having frozen your account...Finally after almost 3 months they closed my personal account and transferred my money (without telling me) to the last bank account of mine they had details of. TransferWise, Monzo and Starling have also collectively received 60 complaints over the same time period. Monzo offers higher rates, but only if you open a separate savings account with one of its partners. More region focused tables about digital banks coming soon. To put it another way, for every £1 spent in 2019, Monzo generated 37p; up from 28p in 2018. Starling, Monzo and Revolut have started to dominate the scene, accompanied by an abundance of trading news and investment updates. For earning interest on your savings. ... like the one I had made for Revolut vs N26, but focusing on the Features and UX one is able to find in Starling and Monzo. However, losses also tripled from £32.8m in 2018 to £105.6m in 2019 (£115.4m pre-tax) where it had invested heavily in staff and global expansion (US, Singapore and Australia) and new products such as a commission-free stock trading facility. Although Starling Bank, Monzo (both accredited and regulated by the FCA as banks) and Revolut (known in industry terminology as an electronic money institutino, but not a bank), do not use Wirecard – all fintechs suffered from the reputational fallout. 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