During November 2017 I was journeying down the Caribbean coast of Mexico.  Taking in the magnificent Mayan ruins and the crystal clear blue waters I was enjoying a fantastic time away from life in London.  However, I was brought right back to reality when I lost my bank card and started fretting about the hours and pounds which I’d have to spend on the phone to my bank in the UK.  In addition, I was flying on to Australia so wouldn’t be able to pick up a new card until I was back in the UK in 3 months’ time.

All these fears were swiftly abated when I started communicating with the customer service department of my bank, Monzo.  I was able to block my lost card and order a new one from within the app, completely friction-free – they even shipped the new card to a friend in Australia!  This was a phenomenal customer experience which built immediate brand loyalty.  Since then I’ve only had good things to say about Monzo and have personally recommended them whenever possible.  The difference between good and bad customer service is critical in today’s digital world.  A couple of bad reviews can sink a company, whilst a viral Instagram post can catapult a brand into the big time.

I’m sure there are many Monzo customers with similar stories of phenomenal customer service as they’ve experienced extremely rapid customer growth across the past year.  They’ve added over a million current accounts in the last six months alone.  This is all the more impressive when you look at Monzo’s corresponding growth in current account profitability. 

If we break down the £15 to run an account in June 2018, approximately £10 would be attributed to customer support.  Monzo will tell you that the further improvements across the next 12 months were down to efficiency gains and increased process automation.  On the surface this looks hugely positive, but it is so critical to make sure that this increase in customer profitability does not result in a reduction in the quality of customer service and support.

Somewhat concerningly, Monzo was recently embroiled in a BBC Watchdog investigation which found that some customers have had their accounts frozen without access to their money for weeks. This raises the question of whether Monzo have managed to maintain the market leading customer service I experienced in 2017. 

Monzo is freezing accounts where they believe suspicious activity or fraudulent transactions are taking place – which, as Monzo noted, is necessary in some cases to comply with anti-money laundering regulations.  The concern is that these were not isolated cases, and most importantly the service that these impacted customers received was perceived to be inadequate and in some cases patronising.

Monzo will learn from this and they are nimble enough to quickly adapt their policies, procedures and training practices to better deal with these scenarios in the future, but you have to wonder if this negative press could have been avoided.  It would be easy to conclude that there were serious gaps in process across the compliance function, and the capacity to fully support these issues has not grown in line with the customer base.  

As Monzo and all of the neo-banks continue to grow the focus will naturally shift to profitability, this is what the business will need to survive.  However, profitability can’t come at the expense of customer service or growth will only be short-lived.

In today’s digital age companies crop up with gaudy valuations overnight, but without careful management of the customer base these could come crashing back to earth.  These hyper-growth phases can be incredibly exciting and rewarding, but they are also fraught with pitfalls; to avoid them, firms need to

• Stay true to what attracted customers to the product or brand in the first place – the end to end customer experience has to extend further than the app
• Automate to improve the overall customer experience, but not at the expense of customer service. Understand the value of the human touch, even to digital natives
• Proactively scale all aspects of the business to deal with growth.  From HR, to Finance, to Compliance.  Don’t let anything slip through the cracks
• A larger, more diverse customer base will bring with it a more complex, diverse range of issues.  The support function must scale to deal with greater volume, but also well trained to handle a wider range of problems

As mentioned in my introduction, I’m a big advocate for Monzo and have personally only ever had a positive experience with them.  I’m hoping that the recent bad press is just a blip and that they can reassure customers that despite their growth, they’ll still be known for phenomenal customer service.  This could be the key in Monzo’s quest to lead the challenger banks and truly compete with the traditional banking players.