How to scale agile development, by Monzo

Monzo is one of the biggest banking disruptors in recent years. Founded only four years ago, the digital-first bank now has over a million customers and a valuation of $2.5 billion. Famous for one of the fastest Crowdcube campaigns when it raised £1 million in just 96 seconds, its customers carry bright coral cards and do all their banking on the app – proving that banks don’t need to have bricks and mortar branches in the digital age.

But scaling at such speed has its disadvantages. CEO and co-founder of Monzo, Tom Blomfield, described how the company started out with an iterative development culture of “move fast and break things”. But now the company gains a lot more attention from customers, investors, and indeed, the press, Blomfield said its technology team had to change its agile attitude slightly.

Speaking at the Wired Smarter conference in London last week, Blomfield explained how four years ago Monzo launched features when they weren’t quite complete, encouraging a small pool of consumers through its Monzo Lab to help test them out.

“When we started out literally no one cared what we did,” said Blomfield. “Now [when we release features] national newspapers write about it. So we have a tough time iterating on products.”

But it’s not just the press Monzo has to be wary of. Now the bank has a much larger customer base and has to adhere to the FCA (financial conduct authority), Blomfield’s team takes a different approach.

“We’re processing £50 billion of payments a year, if we get that wrong, peoples' lives are ruined,” he said.

“We can’t do that in the same way – we’re moving fast, but we’re controlled. The analogy I use is Formula 1.”

Blomfield explained how Monzo used to be a go-kart with a rocket strapped to the back which would go really quick until you hit a bend and you “go off the track and people die”.

Instead the CEO said Monzo needs to be more like a Formula 1 car with precision instruments, huge breaks and a team of professionals, which helps the vehicle tackle bends in the road at speed.

“You come into a pit stop and you need to make a change, you have a team of highly trained professionals,” he said. “This precision engineering and expertise takes seconds and you are out again at 200 mph.”

Turning his analogy back to Monzo, he added: “You need to make sure you are measuring the right things and thinking of all the things that could go wrong, which you don’t have to do with a few dozen employees and a few thousand customers.”

Blomfield said the focus over the next year for the bank is to create a set of products and services that customers are “delighted to pay for”.

He said this fair value exchange is difficult when Monzo’s competition is the traditional banks who offer free current accounts. These accounts actually take about £150 a year to maintain, but traditional banks can cross-subsidise these costs through fees and charges elsewhere in their portfolios.

“As a new challenger you’re at a massive competitive disadvantage and we need to figure out the additional services which are not just a fair value exchange, but an amazing value exchange.”

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