It was May 21: A historic moment for Tom Blomfield. At a cash machine in Clerkenwell, central London, the ambitious young entrepreneur withdrew money from a brand-new account with a new bank at which he was the only customer.
Five weeks later, Mondo has 30 customers testing its prototype account.
Blomfield — a former management consultant now on his third business startup, all before the age of 30 — said a crunch meeting with the Bank of England today would determine whether Mondo gets the formal go-ahead to apply for a banking licence.
Mondo is one of a number of startups trying to tap into customers’ increasing use of digital technology. Ahead of it is Atom, a Durham, England-based outfit that received its banking license last week.
Blomfield and other members of the Mondo team have come from Starling, another would-be digital bank. They are all eyeing the statistics trotted out by the main high-street banks, Barclays, Royal Bank of Scotland, Lloyds Banking Group and HSBC.
Branch usage has fallen 36 percent since 2010, according to one, while the industry lobby group has predicted this will be the year customers use online technology more often than branches to access their accounts.
However, digital banks are not for everyone.
“My granny knows her bank manager by name,” Blomfield said.
Mondo, by contrast, is “for people who get frustrated if they have to wait more than two seconds for things to get done... It’s for people who live their lives on their iPhones.”
Based in a loft-like space in Clerkenwell, Mondo shares an office with Passion Capital, a venture-capital firm that has pumped £2 million (US$3.14 million) into the new business. Denise Kingsmill, the competition lawyer and former adviser to the Royal Bank of Scotland, has been signed up as chair.
The business model clearly relies on a low cost base.
No branches and, Blomfield acknowledges, customers who will need to borrow.
“If you’ve got seven days left before payday and you’ve got £50 left in your account, it’s not difficult to predict you are going to go overdrawn,” Blomfield said.
Mondo aims to let customers block their account until funds become available or borrow a sum, say £200, at prices in the middle of those being offered. At today’s rates that suggests a 20 percent annual equivalent rate — roughly equal to that on a typical overdraft, but with no other fees to pay.
The startups could offer notifications to customers such as warnings about going overdrawn, reminders of bills to pay and information about how they spend their money. Swiping his Mondo app, Blomfield finds he has used his card — which operates on the Mastercard system — in Pret A Manger 11 times in the past month.
For people prone to losing their bank cards, the app allows them to put an instant, temporary block on their plastic until it is located.
To prove the point, Blomfield blocks his card using his iPhone, just as he puts it in the self-service till at his local supermarket. The card is declined. Moments later he swipes it back on from the phone. The card is accepted.
Blomfield said there is huge potential.
“I think that in the next two or three years a bank will be launched that will become the scale of Google or Facebook,” he said.
Is that what Mondo hopes to become?
“We hope so,” he said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to