Following voluntary staff member furloughs and wage cuts in the U.K., Monzo is continuing to take difficult decisions in order to fortify its financial position in the middle of the coronavirus crisis and resulting financial decline. The latest move– which TechCrunch comprehends was being thought about prior to the pandemic, though certainly the choice was escalated and made because of it– will see the U.K. challenger bank shutter its customer support workplace in Las Vegas.
The U.S. station uses 165 consumer assistance staff, who will now lose their jobs, and provided over night client assistance to U.K. clients, a much loved feature of the bank. That has shown pricey for Monzo, which now declares over 4 million customers, and disproportionate to the number of support demands made during overnight hours (12% of queries, obviously). Instead, overnight support will now happen from the U.K.
. It must also be noted that this doesn’t appear to effect Monzo’s U.S. launch. Vegas assistance personnel were servicing U.K. customers only, with U.S. consumer assistance offered by a little team in London closer to the development and model of the Monzo USA beta.
On the other hand, I likewise understand that Monzo Las Vegas employees are being provided two months notice, with full pay and health care. And, as it must do, the bank is providing assistance with CVs and connecting to other employers, and doing things like running interview prep sessions (nevertheless futile that might be with sky rocketing U.S. unemployment). In addition, it is supporting applications for prolonged health care cover after the end of notification period.
As I caveated when specifically reporting on Monzo’s planned furloughs, these steps, although extremely upsetting for the workers affected (which need to never ever be forgotten), are mainly preventive as the bank’s board aims to prepare responsibly for however long the coronavirus-related financial uncertainty continues. (Connected to this, I would not be amazed to see Monzo closing in on some extra financing from existing investors in the interim.)
In addition, unlike numerous fintechs, Monzo is a completely licensed bank, and therefore has a regulative responsibility to hold substantial cash reserves. Under the license, client deposits up to ₤ 85,000 are also secured as part of the U.K. government’s deposit security 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.