Developing an App like Monzo: An Essential Guide to Tap the Fintech Industry

January 14, 2025

Technology disruptions fuel the swift growth of the FinTech industry. They transform the areas such as payments, lending, and insurance. These amendments persuade companies to serve their customers better and gain new ones. Nevertheless, the digital world emphasizes robust security, next-gen technology use, brand loyalty, competency, and efficiency.

Developing user-friendly apps like Monzo is a game-changing phenomenon for businesses wanting to provide accessible and easy ways for customers to monitor their finances. The global transaction value in the “Neobanking” sector of the FinTech market is predicted to reach $9.2 trillion by 2027.

FinTech apps offer a more personalized experience than traditional banking. They keep users engaged with features like real-time transaction tracking, budgeting, and goal setting.

This blog explores the key features, challenges, and factors influencing the cost of building a banking app like Monzo. But first, let’s look at how apps like Monzo attract users and deliver positive business results.

Monzo Business Model Overview

At its core, Monzo is a digital bank that provides different financial products to businesses and customers. It functions as a “neobank,” enabling users to manage finances and open accounts in a few taps.

• Significant Features:

• Users open accounts without visiting a branch.
• Monzo provides a contactless Mastercard debit card for transactions.
• The app sends real-time notifications for every transaction, enhancing security.
• Users receive detailed insights into their spending, helping them manage budgets and savings.

• Monzo Flex:

• Users spread payments over three, six, or twelve months with Monzo Flex.
• Purchases must be between £30 and £3,000 (excluding gambling and crypto).
• No interest for three-month payments; 19% interest for six and twelve months.

• Monzo Overdrafts:

• The app provides overdrafts up to £1,000, depending on credit rating.
• Though there are no extra fees for overdrafts, users must pay a monthly cap of £15.50 for unarranged overdrafts.
• Interest rates range from 19% to 39% EAR.

Different Revenue Streams of Monzo

Monzo does not only offer premium services like competitors. Instead, it generates revenue through several streams.

• Business Accounts: Monzo charges businesses a monthly fee for using their accounts, which are currently in a test phase with 1,000 firms.

• Interchange Fees: Monzo earns a small fee from merchants for each transaction shared with Mastercard. Fees can reach 1%.

• Overdraft Fees: Monzo charges £0.5 daily for overdrafts. Based on credit score, overdraft rates can be up to 39%.

• Savings: Monzo partners with lenders like Investec to offer customers up to 1.3% AER interest on savings. Monzo uses deposits to secure loans and earns interest.

• Loans: Monzo offers loans up to £15,000 with interest rates up to 19.5%, depending on credit score and loan terms.

• Cash Withdrawals: Customers withdraw £200 free monthly. Beyond that, Monzo charges a 3% fee, which covers costs, not profit.

• Energy Switching: Monzo earns a commission by helping users switch plans through partnerships with OVO Energy and Octopus Energy.

• Interest on Cash: Monzo lends customer deposits to other banks, collecting interest (Net Interest Margin). 

What Makes Monzo Online Banking App Stand Out?

The fintech industry is expanding its digital footprints through applications like Monzo. The app development companies actively build platforms like Monzo to help you land in the market promptly. Let’s proceed with innovative features you must know for your fintech app.

• Community-Driven Innovation

Monzo involves users in shaping services through forums and crowdfunding, creating loyalty, and ensuring products meet customer needs.  

• Real-Time Spending Alerts

Instant transaction updates help customers track spending, detect fraud, and avoid surprises.

• Budgeting and Savings

Automatic spending categories and Savings Pots help users set goals and save efficiently.

• Fee-Free Global Spending

Monzo enables international spending without foreign transaction fees and offers fee-free ATM withdrawals abroad.

• Personalized Banking Perks

Monzo Plus and Premium offer more features to users who want, such as virtual cards, custom categories, and travel perks.

• Customer-First Innovation

Monzo’s commitment to user feedback and real-time financial tools sets new standards for the customer experience.

• Flexibility with Loans

Monzo offers easy overdrafts and personal loans with clear Monzo, providing financial flexibility.

• Simplified Business Banking

Monzo’s real-time business insights, automated tax calculations, and accounting integrations benefit SMEs.

• In-App Support

24/7 chat support and self-service tools ensure users always have Monzo’s help when needed.

• Top-Notch Security

Biometric logins and AI fraud detection keep users’ money and data safe, building trust in digital banking.

• Financial Inclusion

Monzo supports all customers, including those without a credit history, ensuring banking is accessible to users.

Monzo’s seamless synergy of tech tools, community involvement, and transparency redefines digital banking and creates an unmatched customer experience.

Development Phase Of an App Like Monzo: A Step-by-Step Guide

Creating a banking app like Monzo needs a good plan and proper execution. Hiring Android app developers is of great help. However, they have expertise in iOS app development as well. Here’s a simple guide to understand the process:

Step 1: Market Research

App developers start by researching the market. They learn about your target audience, app requirements, and competitors’ offerings. It helps you discover what is missing in the market and how to offer something better or different.

Step 2: Define Core Features

Once they understand the market, they plan the main features of your app with your consent. These include money management tools, transaction history, and payment options.

While you aim to develop an app that stands out, it is beneficial to inoculate features like AI, AR/VR, or in-app customer support. Connect with a reputed AI app development company today!

Step 3: Designing Your App

App design includes creating a smooth and easy-to-use experience. An app design agency focuses on a user-friendly platform and simple navigation. Experts make wireframes (rough designs) and prototypes (working models) to understand the app flow and detect design problems early.

Step 4: Development of Your App

Now, it’s time to build the app. Skilled developers write the code and add all the features you planned. Further, they test and improve the app as they work to ensure it works well.

Step 5: Testing & Launching

Before launching, test the app to find and fix any bugs or problems. Once everything works perfectly, you can launch the app. While waiting for approval, have a marketing plan to promote the app when it goes live.

Step 6: Maintenance and Support Services

After the app launch, update it with new features, bug fixes, and security improvements. Regular updates and good customer support help build trust and keep users happy. Many fintech app development companies provide post-launch services to help you make a better investment.

How Much Does Monzo Like App Development Cost?

The development cost of Monzo depends on various factors, including features, platform, complexities, and functionalities. On average, it costs between $10,000 and $15,000. However, the cost increases with the addition of more complex functions and integrations.

Advanced Considerations During Monzo-like App Development

Creating a banking app like Monzo requires careful planning. Developing it according to the present world is an opportunistic way to enhance the revenue graph. Here’s a simple guide to adding essential features:

• AI for Smart Money Management

AI helps users manage their money. It analyzes users’ spending, predicts future expenses, and offers personalized tips. This technology automatically categorizes transactions, assisting users in setting and tracking financial goals.

• Making the App Fun with Gamification

A game app development company adds fun challenges to make the app more engaging. The app rewards users for meeting their savings or budget goals. A community section where users can share tips and experiences is a bonus.

• Connecting with Smart Devices

The fast-paced technology helps users manage their money using smart devices, like smart speakers or watches. It would make it easier for users to access their accounts and make payments without opening the app.

• Secure Transactions with Blockchain

Blockchain keeps transactions safe and transparent, helps prevent fraud, and automates transactions with smart contracts. Blockchain development company creates apps that allow users to invest in small parts of valuable assets through tokenization.

• Eco-Friendly Features

Sustainability-rich features focus on environmental care. For instance, include tools to track users’ carbon footprint or offer eco-friendly investment options.

• Voice Commands for Easy Use

To make the app more accessible, users could control it with voice commands. This would allow them to check account balances, create transactions, or manage finances without touching the screen.

• Extra Security with Biometrics

Adding biometric options like face recognition, fingerprint scanning, or voice recognition boosts security. It ensures that users’ accounts are safe and easy to access.

• Innovative Financial Products

The app offers unique financial products, such as investing in small portions of expensive assets or trading cryptocurrency. This sets the app apart and attracts users interested in these modern financial options.

Perks of Availing Of Monzo-like App Development Services

Utilizing Monzo-like app development services is paramount for getting the fintech platform that drives results. 

A banking app helps you expand your clientele by reaching a wider audience. It allows you to address corporate clients’ pain points and offer fintech solutions to new customers. A mobile-only banking app frees users from location dependency, as all transactions can be done through the app.

Knowing your customer is crucial. Apps collect valuable data from user activities like payments, shopping, and traveling. This information helps improve marketing strategies, predict customer behavior, and increase sales. You can target specific campaigns, such as offering premium cards to active users.

While designing and implementing a mobile banking app can be costly, it offers long-term benefits. It can reduce expenses related to traditional offline banking operations. Encouraging clients to use your services more frequently boosts revenue and keeps you ahead of competitors.

A user-friendly app can increase client loyalty. Gamification features such as achievements, bonuses, and leaderboards can increase engagement. 

Building a strong digital brand is important for recognition. People prefer using apps over ads. A well-designed mobile banking app attracts digital-first customers and helps establish your company as modern and high-tech. The need for banking app development services is growing, making your app competitive.

Summing Up!

Fintech is a profitable and exciting industry with many opportunities for entrepreneurs to tap into banking systems. With a fully mobile banking app for Android and iOS, you can provide the services people deserve through online banking. We have experience working with major fintech players, digital banks, and startups to build software like Monzo for their offerings.

If you want to create a banking app like Monzo, contact us. Our experts will help you bring your vision to life.