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Monzo Company as a Small Entreprise Case Study

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Updated: Nov 10th, 2020

The Rationale for Choosing Banking

Entrepreneurship has become a characteristic feature of the modern world. Entrepreneurship is a mix of Innovation, passion, planning, vision, hard work, wisdom, and taking risks (Bessant & Tidd, 2011). Such spheres as technology have become a perfect platform for entrepreneurial effort. Google and Facebook, as well as numerous successful companies, can be regarded as examples of successful business entrepreneurship (Bolton & Thompson 2013). However, Bolton and Thompson (2013) note that banking is regarded as one of the industries where entrepreneurship is quite uncommon and undesirable. The major reason is the opposing core principles as banking is associated with safety and stability, while entrepreneurship implies Innovation and risk-taking.

However, entrepreneurship is also associated with advances and the development of new ways that transform industries and the entire society. For instance, Facebook and similar networks have transformed the idea of connectedness and helped people explore new platforms of communication (Johnson, Whittington & Scholes 2011). Banking could also benefit from the development of various entrepreneurial projects that could bring more flexibility, more comprehensiveness, and more user-friendliness. Interestingly, entrepreneurial companies are emerging in this sector, as well. It is possible to consider one such company in banking to understand some opportunities and challenges of entrepreneurship in this sector.

Analysis of the Chosen Company


One of the examples of entrepreneurial companies in the banking industry is Monzo Bank Limited. The company was established in 2015 and received a U.K. banking license with some restrictions in 2016 (Monzo 2017c). It was incorporated in 2015 (Company Check, 2017). Tom Blomfield and seven more people worked on the start-up and are now the company’s directors. Initially, the company was called Mondo, and it had 30 clients within five weeks after its establishment (Treanor 2015). The company’s founders came from Starling, a digital bank. In 2016, the company had to change its name to Monzo, as they already exist a company called Mondo (Hern 2016). Tom Blomfield stresses that banking is still an industry where traditions, conventions, and personal contacts are essential. However, the entrepreneur also states that their bank is “for people who get frustrated if they have to wait more than two seconds for things to get done… for people who live their lives on their iPhones” (as cited in Treanor 2015, para. 6). At present, the company employs 80 people and has approximately 50,000 cardholders. Monzo’s total current assets are over £730 thousand, and its net worth is £567.7 thousand (Company Check 2017). In April 2017, it received a full banking license (Andreasyan 2017).

Services Provided

Monzo is an innovative digital bank that offers various services to its clients. Its major competitive advantage, as seen by Blomfield, the provision of the real-time log of the client’s spending (Hern 2016). The company provides a pre-paid MasterCard that is connected with an application that ensures the client’s control over the use of the money. The card is issued by Wirecard Solutions. Blomfield stresses that the app shows the data concerning each transaction within minutes or seconds, while conventional banks can take up to three days to update the information.

At that, the company’s founders understand that more and more banks start offering real-time log. Blomfield argues that their competitive advantage is associated with the comprehensiveness of the data provided as “the amount of information that we ingest and show is a hundred times greater” as compared to other payment networks (as cited in Hern 2016, para. 9). The information provided includes places where the card was used, names of logos, successful and unsuccessful transactions, as well as reasons for failed transactions.

Moreover, the app can arrange the data in a way that will help the client to see how the money was spent. For instance, it is possible to track the places visited, brands bought, and so on. The data can help clients consider their buying habits and become more reasonable (Hern 2016). Traditional banks and many digital financial companies do not offer such services. Another valuable service allows clients to freeze and unfreeze the card within a very short period. There is no need to wait for hours or even days to start using the card the client regarded as lost forever while it was in another pocket.

One of the most attractive features of the card is the fee, which is 0% (Hern 2016). Transactions and any other services are free of charge. Blomfield hopes to make the return on the investment in a way Facebook and Google did it. Advertisers are seen as the major source of income for the company (Hern 2016). It is noteworthy that Blomfield does not have a particular development plan for the company. Monzo’s founders emphasize that they expect the company to evolve and bring positive changes into the human society. Blomfield claims that the use of their cards is a chance to taste the future (Hern 2016).

Finally, another distinctive feature of the company is its transparency and collaboration with the public. Monzo invites people to join “to get a taste of what” the company is creating and help them “make it amazing” (Monzo 2017c, para. 1). Therefore, potential and existing customers can be sure that their needs and even wants will be taken into account. This approach is quite different from the ones used in the banking industry. Traditional banks are often significantly less transparent and responsive although customers’ needs are also taken into account when offering services (Bolton & Thompson 2013).

Benefits of Operating a Small Business

The features mentioned above make it clear that Monzo is an entrepreneurial company that focuses on Innovation and changes in the society. Operating a small company makes to possible to achieve such aim. For instance, such small (but quite far-reaching companies) are often associated with the development of a particular community. Monzo can be regarded as a community of passionate I.T. specialists and professionals in the sphere of banking and finance who collaborate to make the system better (Waupsh 2016). The company attracts people who want to feel the future. These are often people who are a part of the world of social networks. Monzo’s customers are accustomed to existing in digital communities, so they seek to find a similar collaboration and experience in other spheres as well. Being a small company enables Monzo to manage the community effectively and develop quite close relationships with their customers.

For instance, the company’s founders had personal meetings with the first customers (Hern 2016). The start-up could be regarded as a community of those who wanted to try living in the future. At present, the company has another approach to maintain close relationships with its customers. First, Monzo founders want their company to be a Facebook in the banking industry (Treanor 2015). Therefore, it is quite natural that the model of a social network is employed. The Monzo community is the platform for communication and collaboration between the employees and customers. People share information and ideas.

Importantly, a small company can be closer to its customers through extensive communication and effective collaboration. People are ready to share through their smartphones that have started playing a very important role in their lives (Dubiel, Brexendorf & Glockner 2014). Apart from receiving a sense of connectedness, people also feel empowered as they are a part of the process of the company’s development. Small companies have a capacity to respond quicker and more actively to their customers’ needs and desires. Small companies do not have to overcome numerous hierarchical obstacles to change a service or create something new. Moreover, Monzo encourages people to participate in the process of the company’s development. The community of Monzo’s customers “suggests features, tests the app and gives” the company “constant feedback” (Monzo 2017c).

It is also necessary to add that the company is transparent in terms of its employees. The official website includes a lot of information concerning key employees and various teams working on various projects (Monzo 2017b). This transparency can be regarded as a strategy similar to first face-to-face meetings when Monzo’s founders told people about themselves and their company. Therefore, a sense of close relationships is maintained.

Rainone, Rainone, and Musial (2014, p. 287) stress that another benefit of small companies is their awareness of “know how” about all the aspects of the business. Entrepreneurs tend to know perfectly well about the peculiarities of the business, which enables them to use innovations. Monzo can be characterised by such ability. As has been mentioned above, 80 people work for the company. They are professionals in different spheres including banking, I.T., H.R., and so on. However, Monzo employees work closely with each other, which makes them a team of effective collaborators. They learn about peculiarities of different aspects of their business and collaborate to address all possible issues.

Challenges of Operating a Small Business

One of the most significant challenges a small company can face is associated with legal aspects. This is specifically true about the banking industry. The existing regulations in this sphere are quite strict and may require the investment of considerable funds (Whalen 2013). It is also necessary to note that any innovations are often associated with a closer attention of regulators who have to make sure that new strategies and methods used can comply with existing norms. This challenge was serious for Monzo as the company received only a limited license. Nevertheless, the organisation managed to get the full license, which shows that small entrepreneurial companies can be successful even in such spheres as banking where novelty is regarded as something negative or potentially dangerous.

Another challenge is, ironically, associated with a company’s growth. Small businesses often involve only several people during the initial stages of their development. Longenecker et al. (2013) claim that the transition from a small company involving several people to a business employing different professionals is a significant challenge for a small company. It can be difficult to preserve the entrepreneurial approach in a company that is growing and acquiring more hierarchical features. However, Monzo is successfully addressing this challenge. The company still does not have a strict hierarchy. The employees collaborate and work on various projects (Monzo 2017b). As has been mentioned above, the company’s customers feel (and are) empowered to initiate some changes. Employees are also empowered to come up with ideas that can be implemented.

The lack of resources can also be a significant challenge for a small company (West 2014). Even in developed countries, entrepreneurs can face financial constraints and limit access to financing. However, Monzo is likely to address the challenges associated with limited resources quite effectively as the company’s community can become a certain source of financing. First, Monzo customers can provide resources (donate, buy shares, and so on). More importantly, the development of a comprehensive network is associated with new ties and links to potential partners.

Team building efforts and entrepreneurial processes contributing to Monzo’s success

Monzo can be regarded as one of the brightest examples of an entrepreneurial company due to its use of Innovation and its impact on the society. As far as the entrepreneurial processes are concerned, it is necessary to mention the focus on connectedness and empowerment of all the stakeholders. Berry and Schleser (2014) note that empowerment of employees and a sense of connectedness of customers are some of the primary entrepreneurial processes that contribute to the company’s growth. It is possible to note that Monzo’s employees and customers are empowered and connected. All the stakeholders take an active part in the company’s development.

Empowerment and connectedness are closely connected with the concept of community. The Monzo community contributes to the success of the company by making it more transparent than others (Monzon 2017b). The development of this network is one of the most potent tools necessary for sustainable growth. The community enables the company to address any shifts in the industry and the market in a very efficient way. These responses are often timely (as there is almost no hierarchy) and innovative. Berry and Schleser (2014) stress that the contemporary business world is characterised by the use of networks. People are willing to feel connected to a group of like-minded individuals.

Modern customers are also willing to use technological advances that make their life easier and more comfortable (West 2014). These technological advances are associated with the use of innovative approaches. Monzo is a technological and innovative business that helps people take control over their finances. It is noteworthy that the focus on Innovation is the most effective entrepreneurial process contributing to the company’s success. The company is often regarded as a business similar to Facebook. The latter changed the way people share information. Monzo can shape the way people manage their finances.

In order to sustain the feeling of connectedness and empowerment as well as encourage employees to innovate, Monzo pays a lot of attention to diversity. The company tries to make its staff as diverse as possible through hiring people of different backgrounds (Monzo 2017a). People of different ethnicities, ages, educational backgrounds and so on are brought together to share ideas and perspective, which leads to the development of innovative strategies. This diversity is maintained through the use of appropriate working conditions. For instance, flexible hours and the ability to work from home enable people to balance their work and families, which can be specifically important for females and people with special needs.

It is also necessary to mention that Monzo manages to be a careful listener when it comes to the development of new products and services. As has been mentioned above, the company’s employees feel empowered, but, more importantly, they are active agents of change in the entire system. West (2014) emphasises that mobile technologies are transforming the human society. It is also possible to add that Monzo is transforming the society and the banking system in the United Kingdom (and even the entire world). The banking system is becoming more flexible and more transparent, which is valued by the modern people.

Finally, Monzo’s employees receive extensive training that helps them collaborate effectively and be aware of the latest advances in the industry (Monzo 2017a). Miller (2014) states that training is one of the key factors of an entrepreneurial company’s success. At that, training should address such aspects as the acquisition of knowledge and skills concerning particular spheres (I.T., banking, sales, and so on) as well as different methods to collaborate effectively. The efficient collaboration is specifically important in companies characterised by a significant degree of diversity. People of different ages, genders, ethnicities, and so on have to work in cross-sectional groups. Monzo manages to ensure effective training and collaboration.


It is necessary to note that this research has provided me with insights into entrepreneurship with the focus on such sphere as banking. I learnt about peculiarities of successful entrepreneurial companies as well as possible challenges they may face. Now, I understand that managing a small business in the banking industry is quite a challenging task due to the focus on traditions, regulations, and restrictions in the banking sphere. However, I feel that my conclusions can be a bit too optimistic. It is difficult to predict the success of the company that is only less than three years in the market. I have learned about many digital banks that are paving their ways into the U.K. market. There are various similar companies in different countries. Therefore, it can be difficult to predict which of the companies will win the competition. My research is also confined to a small company. At that, further research into the period of the transition to a large (or even multinational) organisation can shed light on the way entrepreneurial companies can develop.

Apart from gaining particular knowledge on entrepreneurial companies, I acquired more skills associated with researching. I implemented a thorough research and analysed many resources. I tried to use reliable and academic sources, so I focused on such resources as books, reputable newspapers, and the company’s official website. I had some doubts as to using the website as there can be doubts as to reliability and credibility of the provided data. However, it is also clear that the official website is the company’s perspective that should also be analysed or taken into account. The company’s goals and values can be elicited when browsing Monzo’s official website.


In conclusion, it is necessary to note that Monzo is a remarkable entrepreneurial company operating in the banking industry. The digital banking market is associated with Innovation and change. Monzo’s founders claim that their company is created to shape the banking industry and add more flexibility to it. Monzo takes into account its customer’s needs and various ideas that can potentially improve the customer’s experience. This empowerment of customers is one of the factors contributing to the company’s success.

Another important strategy associated with the company’s success is its adherence to the principles of diversity. The company’s employees have different backgrounds, which facilitates the process of Innovation. People have different perspectives, which enables them to find innovative ways to address existing issues. When it comes to human resource strategies, it is also necessary to add that entrepreneurial concepts are also utilised. Employees are empowered and encouraged to contribute to the organisational growth.

One of the major peculiarities of the company is its impact on the industry and the entire society. The digital bank under analysis can shape the way people manage their finances. It can be difficult to predict whether the company can be successful in the future as it can be soon overtaken by its competitors. However, it is clear that the contemporary society is going to be living at a fast pace. People will be able to manage their data more effectively and within a limited period of time. This trend may have a positive impact on the development of humanity as people will be able to focus on such vital issues as environmental sustainability, cross-national collaboration, and so on. Therefore, it is possible to note that Monzo, as well as other entrepreneurial businesses, may contribute to the development of the banking industry as well as the evolution of the humanity, in the long run.

Reference List

Andreasyan, T 2017, , Banking Technology, Web.

Berry, M & Schleser, M 2014, ‘Creative mobile media: the state of play’, in A Berry, M & Schleser (eds), Mobile media making in an age of smartphones, Springer, New York, pp. 1-10.

Bessant, J & Tidd, J 2011, Innovation and entrepreneurship, John Wiley & Sons, Chichester.

Bolton, B & Thompson, J 2013, Entrepreneurs: talent, temperament and opportunity, Routledge, Oxon.

Company Check 2017, , Web.

Dubiel, A, Brexendorf, TO & Glockner, S 2014, ‘Keeping up with the virtual voice of the customer – social media applications in product innovation’, in A Griffin, CH Noble & SS Durmusoglu (eds), Open innovation: new product development essentials from the PDMA, John Wiley & Sons, Hoboken, pp. 57-81.

Hern, A 2016, , The Guardian, Web.

Johnson, G, Whittington, R & Scholes, K 2011, Exploring strategy, Financial Times Prentice Hall, London.

Longenecker, JG, Petty, JW, Palich, LE & Hoy, F 2013, Small business management, Cengage Learning, Stamford.

Miller, CW 2014, ‘Open innovations as a discovery solutions for confronting the extraordinary challenge’, in A Griffin, CH Noble & SS Durmusoglu (eds), Open innovation: new product development essentials from the PDMA, John Wiley & Sons, Hoboken, pp. 259-278.

Monzo 2017a,, Web.

Monzo 2017b,, Web.

Monzo 2017c, , Web.

Rainone, D, Rainone, M & Musial, L 2014, ‘How to work with small companies to expand your open innovation capabilities’, in A Griffin, CH Noble & SS Durmusoglu (eds), Open innovation: new product development essentials from the PDMA, John Wiley & Sons, Hoboken, pp. 281-299.

Treanor, J 2015,, The Guardian, Web.

Waupsh, J 2016, Bankruption: how community banking can survive fintech, John Wiley & Sons, Hoboken.

West, D.M. 2014, Going mobile: how wireless technology is reshaping our lives, Brookings Institution Press, Washington.

Whalen, G 2013, ‘Trends in organizational form and their relationship to performance: the case of foreign securities subsidiaries of U.S. banking organizations’, in RA Eisenbeis, FT Furlong & S Kwan (eds), Financial modernization and regulation: a special issue of the journal of financial services research, Springer Science & Business Media, New York, pp. 1-10.

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