Hey Fintechers and Fintech Newbies 👋

For those you read Part 1 of last week’s long Monzo deep dive you know what’s coming.

For folks new to Fintech: Under the Hood, I highly recommend you start by reading last week’s edition if you haven’t done so already, which covered Monzo’s founding story, a detailed timeline of events from 2015 to present day, an up to date chart of their customer growth, an overview of their product stack, and their new releases and what they signal.

Monzo: 10 Years That Changed Banking Forever - Part 1

This week we dive a bit deeper into how they really changed banking, understand their cool community building activations, and look forward to some of the challenges they’ll face in the near future.

Here’s what to expect from Part 2:

• How they changed banking forever

  • Hero and Hygiene features - Transforming consumer expectations of what a banking app can do

  • Pioneering BaaS usage - Using BaaS to get to market and test before obtaining a licence

  • Technology Approach w/Microservices and Clustering - Shifting the industry from Monolith tech stacks to Microservice architecture

• A P.S. for TS Anil

  • The crucial role he had in Monzo’s maturity era and what one OG founders comments

• The biggest challenges on the horizon

  • Globalisation

  • Product Stack Growth vs UX

  • AEO and the Rise of AI-Native Digital Banks

• Five Lessons for builders from Monzo’s journey

  • 1. Don’t chase perfection
  • 2. Truly understand your ICP
  • 3. Build love before monetisation
  • 4. Turn constraints into differentiation
  • 5. Treat Community as a moat, leverage it as a growth engine

If the last edition is already fresh in your mind, you’re reading to go, but if not, feel free to quickly scan Part 1, especially the last section on new products.

Now let’s get into in 💪��

NOTE: You know the drill. This is a deep, deep dive and your mail client might crop the end of this so click here to see the full, unclipped edition, drop a like and comment at the end, and don't forget to subscribe. 

This one is a banger and the lessons at the end should be used as a playbook for building world class consumer fintech products!

How** did Monzo change banking forever? 🤔**

When I say “changed banking forever”, I’m specifically talking about how consumers use products and how banks build them.

And I promise I’m really not being hyperbolic.

The unique way Monzo built its product, brought it to market, and created such a strong community of loyal followers made everyone in the industry rethink what a banking app can be and how to approach building a successful digital banking product.

Here are the memorable ways they led by example and forced the industry to change by doing things differently.

Hero to Hygiene features 🦸��‍♂️

One of the clearest examples is how many features we now consider standard, what product teams call _hygiene features _that customers would be surprised or disappointed if they weren’t in the product, were once genuinely radical. Features like real-time transaction notifications, rich transaction feeds, merchant-level insights, in-app card freezing, and PIN viewing or changing without visiting an ATM are now table stakes. Customers would be surprised if they weren’t there.

These were all groundbreaking ten years ago, but completely normal now.

This image and article I put together for a ‘Digital Bank Hero & Hygiene features edition’ was based on some digital bank builds I led, and the precedent Monzo set

☕️🦸��‍♂️ Hero & Hygiene features: The decade that shifted digital banking expectations

Monzo created a set of what were unmistakably hero features at the time

Differentiated, opinionated, and deeply customer-centric.

Because they worked so well, the rest of the industry followed. Over time, these hero features became hygiene. When you open a high-street bank app today and see options like Freeze Card or View PIN, you’re looking at defaults Monzo helped define.

What’s important is that banks always could have built many of these features, but Monzo just thought about things differently.

🧠 Take transaction notifications. Instead of waiting for a payment to fully settle 2-3 days after the card was used, Monzo surfaced the authorisation event in real time, and that became the real-time transaction notification, whether the auth was successful or the payment failed. That single decision gave customers immediate visibility into their spending, reinforced trust, and aligned perfectly with Monzo’s core pillar of transparency. It seems obvious now, but it required rethinking how banking systems should behave.

It’s simple, and it’s now what most transaction feeds and notifications hang off, rather than settled status in a core banking platform.

What makes this more impressive is that they’re still shipping things “The Monzo Way”. Features like the 1p Challenge show the same instinct at work, creating new hero features that quietly reshape behaviour and, over time, will likely become expected elsewhere.

Don’t be surprised if similar challenges start appearing in traditional bank apps over the next couple of years.

That, more than anything, is the clearest signal that Monzo is still pushing the industry forward.

Monzo’s Use of BaaS: Banking as a Product, Not a Licence 🪪

One of the less visible, but arguably more important, ways Monzo changed banking was how it got to market before becoming a bank.

Instead of waiting years to secure a full banking licence before shipping anything, Monzo used a prepaid + Banking-as-a-Service-style setup to launch early, learn fast, and build demand while regulation caught up. At the time, this was highly unconventional. Most aspiring digital banks disappeared for years behind regulatory processes. Monzo shipped.

It’s important to note that Monzo raised £1million directly from customers in a crowdfunding round, before it was a fully licenced bank.

This approach reframed banking as a product problem first, and a licence problem second. By decoupling customer experience from full-stack banking infrastructure, Monzo proved that:

• You could validate demand before becoming a bank

• You could iterate in public, with real users and real money

• You could build trust before deposits were even held

This model is now the standard playbook. Prepaid cards, EMI licences, sponsor banks, and modular infrastructure are how most fintechs start today. In 2015, that wasn’t obvious and Monzo showed the industry a faster, lower-risk path to building regulated financial products.

In doing so, they helped normalise the idea that banking doesn’t need to be vertically integrated from day one, a principle that underpins much of today’s fintech ecosystem.

From Monoliths to Microservices: How Monzo Reset the Tech Stack ◼️

One of the least visible, but most consequential, ways Monzo changed banking was how it was built… under the hood (the perfect on brand phrase for taking a peek at their tech architecture 👀).

At the time Monzo launched, most banks were still operating on monolithic core systems

For you movie fans, if you’re thinking about all the components of a traditional banking app all in one big literal monolith a la 2001: A Space Odyssey, you’re my kinda person.

The Monolith from 2001: A Space Odyssey

These are tightly coupled platforms in a ‘monolith’ in which front-end experiences, back-end processing, and core banking logic are deeply intertwined. Shipping new features was slow, risky, and expensive. A small change in one area could have unintended consequences elsewhere in the monolith app, which is why releases were often bundled into infrequent, high-stakes updates.

💡 During my Citibank days, we deployed our Fixed Income trading platform updates into a monolithic architecture, and because it was tightly coupled with things like the reference data systems and pricing models, it meant only 4 major releases a year, each of which was preceded by a 2-hour CAB call.

Monzo took a radically different approach. From day one, it built its platform around a decoupled, microservices-based architecture, borrowing patterns from modern consumer tech companies rather than traditional banks. Individual services were small, independent, and owned end-to-end by teams. Features could be developed, tested, and deployed without waiting for a core banking release cycle.

Read the rest here