Monzo, the U.K. challenger bank with over 4 million account holders, is taking a number of preventive actions to help persevere the current coronavirus recession, including voluntary furloughs and its CEO passing up an income, TechCrunch understands.
In an internal company-wide memo released by co-founder and CEO Tom Blomfield, he tells the bank’s over 1,500 staff that he will not be taking an income for the next twelve months, which the senior management group and board have volunteered to take a 25% cut in salary, as have other “Monzonaughts” within the company.
In addition, a limited variety of Monzo’s U.K. workers are being offered voluntary furloughing for two months, as part of the plan rolled out by the U.K. government to safeguard tasks throughout the coronavirus lockdown, which is already impacting many companies– not just Monzo– consisting of several other fintechs I know of. Furlough ensures that workers still get paid even when work has decreased which when things ideally return to regular there is a job to come back to.
Although well capitalised, like other banks and fintechs, Monzo has seen customer card invest decrease at home and (of course) abroad, indicating it is seeing less revenue from interchange charges. New account signups have also slowed, as has client assistance requests. When demand selects up once again, it for that reason makes sense to make use of the furlough plan to assist protect tasks in the future. By making it voluntary, it also means staff with kids to house school or liked ones to look after, can utilize the choice to ideally make their lives much easier for the time being.
Particularly, I understand Monzo is accepting as much as 175 furlough applications in customer support, and up to 120 applications from other parts of business.
It’s not clear if other U.K. challenger banks are likewise utilizing the federal government’s furlough scheme. I have actually asked Starling and Revolut, for example, but have yet to hear back. As currently pointed out, the plan is offered to U.K. business right throughout the board and numerous startups, including fintechs, have already applied furloughing as a pre-cautionary step.
It needs to be worried that none of the above must affect clients at Monzo, which, as a digital bank, is quite well-positioned to run throughout lockdown and with all staff currently working from house. It is also a completely licensed bank, with customer deposits as much as ₤ 85,000 protected as part of the U.K. government’s deposit protection scheme.
Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.