Monzo considers launching mobile service to rival major phone networks

Monzo is considering offering its own mobile contract in a move which could see the digital bank take on the UK’s biggest phone networks.

The 10-year-old lender confirmed it was in the “early stages” of developing the idea.

The Financial Times reported that Monzo was exploring the launch of a digital sim, which connects to a mobile network without a physical sim card, and offering monthly contracts.

The company is likely to enter the market as a mobile virtual network operator, reports said.

This refers to companies such as Giffgaff, Voxi, Tesco Mobile and Lebara, which offer mobile services by “piggybacking” off the network provided by big UK operators – namely VodafoneThree, EE and O2.

A spokeswoman for Monzo said: “Monzo is known for transforming products – and an entire industry – to deliver a great experience for customers.

“So when we heard from our customers that mobile contracts can be a pain point we set out to explore how we could do this the Monzo way, and are in the early stages of developing this idea.”

Monzo ranked in first place in the latest set of banking satisfaction results compiled by the Competition and Markets Authority, covering Britain and Northern Ireland.

The bank, which has around 13 million customers, was voted the highest for overall service quality.

Digital challenger banks have consistently beaten traditional lenders in surveys asking how banks are serving their customers.

Monzo hailed its first annual profit last year having grown to become the UK’s seventh-largest bank since it was founded in 2015.

About a third of its customers use Monzo as their primary bank – leaving a larger proportion who continue to lean on high street lenders for day-to-day banking including receiving their salary.