The Monzo Effect: How a fintech became a verb for Gen Z

By Mary Neale-Smith, Financial Services

Explore Monzo’s popularity among Gen Z, from its innovative mobile banking features, vibrant branding, and a strong social media presence, making financial management both trendy and accessible

Monzo has my friends and me exactly where it wants us. From university houses bill sharing, to spilling the cost of groceries on holiday, to requesting a mate for the pint they owe from last week, the phrase “I’ll Monzo you” is firmly cemented in our vocabulary.

According to GlobalData’s 2023 Financial Services Consumer Survey, 52% of Monzo’s customers belong to Generation Z (<27 years old) and two thirds are under 30 years old. So, what’s the key to Monzo’s popularity among Generation Z?

On Wednesdays we wear pink

Colours can have a huge impact on consumers’ perceptions and emotions towards a brand. Since the introduction of bank cards, companies have battled to balance staying true to their brand identity, whilst simultaneously trying to catch the eye of consumers. Historically bank cards have been blue, grey and green – colours that we regard as stable, calming, neutral and trustworthy. All the emotions banks want to evoke in customers.

So, when Monzo launched into the banking sector in 2015 it was among the first to challenge traditional high street banks, not only with its offering to consumers, but with its coral pink card breaking the norm.

The eye-catching colour of the cards make them a clever marketing tool. Before the brand was well known, taking the card out of your wallet would immediately get people to ask you what it is, leading to an inevitable conversation about how useful the app is, that not only helped word spread about the startup, but let customers back in the early days signal to others that they were early adopters of a trendy new startup.

And the bright coral cards were initially intended to only be a prototype, like how a car maker might show off their future design in bright colour. However, an unexpected wave of community support for the coral card convinced Monzo to keep it around, turning a marketing move into an iconic symbol for the brand.

They also used to run a smart referral bonus that gave £5 to both the customer and to the new friend who they managed to sign up for an account. This cash boost scheme was what originally drew me to Monzo. As a student, you’d do anything for free money – like signing up for 4 different student bank accounts to get various free rewards – and Monzo spread like a wildfire via referral codes and friendship groups.

You can’t force verb-ing

Monzo has nine million retail customers in the U.K. In 2023 alone, the company added two million customers. There are also 400,000 companies using Monzo for their business banking needs. It’s a fast-moving market and Monzo’s popularity among Gen Z isn’t all down to the flashy pink card and old referral scheme.

The ‘verb-ification’ of Monzo – where the name of a product is perceived as a performed action and becomes synonymous with it – has become a way for young people to describe sending money and is a symptom of the fintech’s success.

How did Monzo do it? By embracing its position as a modern mobile bank, Monzo hammered home its convenient and proactive tools to managing money. From easy account setup, to saving pots that automatically receive money from rounding up transition, immediate spending notifications and frictionless peer-to-peer transactions via phone numbers, Monzo capitalised on being at the forefront of mobile banking.

In 2015, the idea of banking solely through an app would have made many skeptical. Now, according to Which’s 2024 guide, four of the five top banks are digital and every major bank, from traditional to challenger, has skin in the mobile banking game.

Since Monzo started in 2015, banks and building societies have closed 5,908 branches. That’s roughly 54 each month as the sector has seen a rapid decline in the use of physical branches. This significant change highlights how the banking industry is moving towards a digital-first approach, signaling a future where physical branches may become the exception rather than the norm. It’s important to acknowledge, however, that this digital shift is controversial, particularly for elderly and vulnerable populations who may find digital services less accessible.

Not your parents’ bank account

But beyond the smooth user experience and handy tools to manage money, Monzo has also successfully tapped into the most effective way to connect with Gen Z – social media.

We’ve all cringed at attempts from businesses social media account trying too hard to be cool.

Monzo seems to have struck the right balance. Its jargon-free, inclusive tone of voice translates from the app to its social media presence, contrasting with the formal corporate speak expected of traditional banks.

Monzo embraces Gen Z and millennials’ self-deprecating tendencies. From resharing viral tweets from users bemoaning the app for telling them how much they’ve spent in a particularly expensive month to LinkedIn posts offering apologies for mistaken excitement over a notification from Monzo about a £0.10 TFL charge, thinking it was a message from a crush.

This approach not only showcases Monzo’s understanding of its audience but highlights the impact of digital marketing on success. It reinforces that when digital marketing is used effectively, it can strengthen and enhance consumer perceptions of a brand.  

Can you grow out of your Monzo?

Monzo’s current popularity with Gen Z is undeniable, but can it last? I recently read an article that labeled Monzo as “trendy,” using the term in the same mildly disparaging manner a grandparent might describe ripped jeans. The article argued that the platform’s abundant use of emojis made it resemble a bank for children.

While the criticisms in the article didn’t hit as hard as the author might have hoped – because really, who doesn’t love a good emoji? – it did raise a compelling question. As Monzo’s Gen Z users grow up, will they stick with the bank, or will it just be a steppingstone to a more ‘adult’ account? Will those students who were drawn to the digital bank for its notifications and spending pots decide to trust Monzo with their first paycheck, their credit card, and perhaps even their first home savings?

Monzo has been a key player in influencing the mobile banking landscape, making it easy and hassle free. The instant notification of transactions, spreading the cost of payments over time, separating money into pots to pay bills, shared tabs and virtual cards are all features that I never knew I needed, but now I can’t imagine going without them.

Through a combination of smart marketing, relatable ethos, and useful products, Monzo’s popularity among Generation Z is indisputable. Not only has it secured its place as indispensable in managing my finances, but Monzo is now absolutely necessary to ensuring my friends’ holiday plans make it out of group chat.