UK digital bank serves clients shunned by big lenders

Monese has expanded to 31 nations in Europe with two million customers in only five years of operation. (AFP)
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Updated 23 February 2020

UK digital bank serves clients shunned by big lenders

  • In Britain, about 80 percent of Monese customers are foreigners whose salary goes directly into their account

LONDON: Among Britain’s digital app-based banks that are attracting moneyed urban millennials is Monese, which also courts customers neglected by the country’s established lenders.

In early 2000, Estonia-born entrepreneur Norris Koppel arrived in Britain and spotted a major gap in UK banking for newly arrived foreigners who had trouble opening traditional accounts.

Koppel was snubbed by banks owing to a lack of address documents and no credit history — and vowed to help those in a similar predicament.

In the nation’s booming financial technology or fintech sector, mobile phone app-based “neo-banks” such as Revolut, Monzo and Starling have established themselves as plucky upstarts.

Koppel’s lender Monese joined them, expanding to 31 nations in Europe with two million customers in only five years of operation.

“Investor trust in Fintechs and the amount of investment being poured into neo-banks is actually very significant; it hasn’t really slowed down. 2019 was definitely a peak point so let’s see how 2020 goes,” Koppel said.

“It’s very clear that banking is going through fundamental changes . . . and there are a group of neo-banks including Monese who are on top of that wave.”

The company describes itself as an electronic money institution that provides banking facilities — but it does not currently offer credit. “Monese is built for people who are moving to a different country, starting a new life, finding a better job, retiring, going for studies, or getting married somewhere else,” Koppel said.

In Britain, about 80 percent of Monese customers are foreigners whose salary goes directly into their account. Groups such as Monese that only operate online carry out checks to verify the identity of new applicants to help fight money laundering. The app aims to compete with Revolut and Monzo, which have eight million and three million customers respectively in a fiercely competitive market.

Monese expects to turn a profit by 2021. It has a global workforce of roughly 400 people, describes itself as the “Uber of banking,” in reference to the popular ride-hailing app. “It’s a good comparison,” Koppel said, noting that it was used by a lot of gig-economy workers at Uber and takeaway delivery service Deliveroo.

Britain’s traditional banking sector, which is still reeling from the 2008 global financial crisis and a string of product mis-selling scandals, retains a strong grip on personal banking, experts say.

Warwick University’s Andreas Kokkinis, who specializes in corporate law and financial regulation, said that fintech was gaining a foothold however.

“The six biggest UK banks have 87 percent of the market share for current accounts so the remaining 13 percent is split among smaller conventional banks and building societies, and challenger banks,” he said. “However, challenger banks, which operate exclusively online and thus offer cheaper services, are popular among customers below the age of 37.”


OPEC, allied nations extend nearly 10M barrel cut by a month

Updated 06 June 2020

OPEC, allied nations extend nearly 10M barrel cut by a month

  • The meeting, originally scheduled for next week, was brought forward to Saturday

VIENNA: OPEC and allied nations agreed on Saturday to extend a production cut of nearly 10 million barrels of oil a day through the end of July, hoping to boost energy prices hard-hit by the coronavirus pandemic.
Ministers of the group and outside nations like Russia met via video conference to adopt the measure, aimed at cutting out the excess production depressing prices as global aviation remains largely grounded due to the pandemic. It represents some 10% of the world's overall supply.
However, danger still lurks for the market. Algerian Oil Minister Mohamed Arkab, the current OPEC president, warned attendees that the global oil inventory would soar to 1.5 billion barrels by the mid-point of this year.
“Despite the progress to date, we cannot afford to rest on our laurels,” Arkab said. “The challenges we face remain daunting.”
That was a message echoed by Saudi Arabia's Oil Minister Abdul Aziz bin Salman, who acknowledged “we all have made sacrifices to make it where we are today.” He said he remained shocked by the day in April when US oil futures plunged below zero.


“There are encouraging signs we are over the worst,” he said.
Russian Energy Minister Alexander Novak similarly called April “the worst month in history” for the global oil market.
The decision came in a unanimous vote, Energy Minister Suhail al-Mazrouei of the United Arab Emirates wrote on Twitter. He called it “a courageous decision and a collective effort deserving praise from all participating producing countries.”
OPEC has 13 member states, including Saudi Arabia. The additional countries part of the plus-accord have been led by Russia, with Mexico under President Andrés Manuel López Obrador playing a considerable role at the last minute in the initial agreement.
Crude oil prices have been gaining in recent days, in part on hopes OPEC would continue the cut. International benchmark Brent crude traded Saturday at over $42 a barrel. Brent had crashed below $20 a barrel in April.
The oil market was already oversupplied when Russia and OPEC failed to agree on output cuts in early March. Analysts say Russia refused to back even a moderate cut because it would have only served to help US energy companies that were pumping at full capacity. Stalling would hurt American shale-oil producers and protect market share.
Prices collapsed as the coronavirus and the COVID-19 illness it causes largely halted global travel. That also hurt US shale production, drawing the ire of President Donald Trump. But Trump welcomed the earlier deal, as US Energy Secretary Dan Brouillette did on Saturday with the extension.
“I applaud OPEC-plus for reaching an important agreement today which comes at a pivotal time as oil demand continues to recover and economies reopen around the world,” Brouillette wrote on Twitter.
Under a deal reached in April, OPEC and allied countries were to cut nearly 10 million barrels per day until July, then 8 million barrels per day through the end of the year, and 6 million a day for 16 months beginning in 2021.
However, some countries produced beyond their quotas set by the deal. One of them was Iraq, which remains decimated after the yearslong war against the Islamic State group.
On Saturday, Iraq Oil Ministry spokesman Assem Jihad said in statement that Baghdad had “renewed its full commitment” to the OPEC+ deal.
“Despite the economic and financial circumstances that Iraq is facing, the country remains committed to the agreement," Jihad said.
Analysts had expected OPEC and the other nations to extend the cuts of 10 million barrels per day by one more month, but not longer, since the level of demand is still fluctuating.
“If the demand is great, countries like Russia will want to produce more oil, so they probably won’t want to get locked into a longer-term deal that may not help them,” said Jacques Rousseau, managing director at Clearview Energy Partners.