Digital bank Monzo is exploring a significant expansion into the telecommunications sector, potentially challenging Britain's established mobile networks with its own phone contract offering.
The 10-year-old lender has confirmed it is in the "early stages" of developing the concept. Reports, including from the Financial Times, suggest Monzo is investigating the launch of a digital SIM, enabling connection without a physical card, alongside monthly contracts. The company is expected to operate as a mobile virtual network operator.
This refers to companies such as Giffgaff, Voxi, Tesco Mobile and Lebara, which offer mobile services by “piggybacking” off the network provided by big UK operators – namely VodafoneThree, EE and O2.
A spokeswoman for Monzo said: “Monzo is known for transforming products – and an entire industry – to deliver a great experience for customers.
“So when we heard from our customers that mobile contracts can be a pain point we set out to explore how we could do this the Monzo way, and are in the early stages of developing this idea.”
Monzo ranked in first place in the latest set of banking satisfaction results compiled by the Competition and Markets Authority, covering Britain and Northern Ireland.
The bank, which has around 13 million customers, was voted the highest for overall service quality.
Digital challenger banks have consistently beaten traditional lenders in surveys asking how banks are serving their customers.
Monzo hailed its first annual profit last year having grown to become the UK’s seventh-largest bank since it was founded in 2015.
About a third of its customers use Monzo as their primary bank – leaving a larger proportion who continue to lean on high street lenders for day-to-day banking including receiving their salary.
