What's up you guys, sasha here now, i have recently talked a huge amount about monzo. I talked about some of the financial issues that they've been having some other updates about them. I've talked about the fact that they've released these new paid premium and plus accounts, and whether they're good or not - and i have several reviews of that, so there's a lot of interesting stuff that i've recently covered, but monzo is still doing incredibly well as of february. This year, in their annual report, they said that they have 3.9 million customers.

That may well be over five million. Now, if they're continuing the same kind of gross trajectory that they were on before, we just don't know in the last quarterly update in july, they didn't mention that number at all, and actually since then they have stopped doing the quarterly all together. So we have no idea as to exactly why they decided to stop doing that whether there was anything that they didn't really want to talk about, if they're too busy trying to fix whatever it is they're trying to fix, but in any case um they are still An incredibly popular bank, but but the question is: why are they remaining so popular? Why are the customers still flocking to them and why are people choosing them over their competitors, despite everything, that's been happening in the news around them now, the really one big massive reason why, in my opinion, people are doing it is their pots. Their pots are by far the strongest thing about their account.

It is the one thing whenever i make any video about absolutely anything to do with challenger banks. The one thing that i get in comments over and over and over again is: i love the pots the monzo do and the reason is, nobody else has managed to get even close to the same functionality in the same technology. I'm starting and my knees and some other people have done something vaguely similar, but those are just miles away from the way the pots functionality works currently on monzo. So i just wanted to explain exactly what that pots functionality is why i think it's really great and just a few interesting inside pieces about what might be happening and wait for it.

The big reason why pots might also be the big reason why monzo might actually not do so well in the next 12 months. Let's dive right in now, once they first launched their card. That requires sunglasses just to get it out of your wallet. There was a lot of really positive views on some of the features because they were brand new and most people just didn't offer anything remotely close.

You could go and spend abroad for free. You could go and withdraw cash abroad for free everything. Pretty much was free. You could split your bills, you could make payments to people nearby very easily, but the issue is all of these advantages have sort of aged in a way where now all of their competition is catching up and beginning to do all the same stuff.

So if you look at challenger banks and actually some other banks as well, there's now lots and lots of products out there which allow you to go and spend abroad for free as well other challenger banks are also offering free cash withdrawals. In fact, following monzo's recent changes to the terms conditions starling's offering is now better, they offer you a better amount of money, the higher amount of money that you can go and withdraw for free when you're traveling abroad. So all of these competitive advantages are just waning. There's now dedicated apps and lots of banks and lots of other services beginning to offer bill splitting functionality, just like uh, some of the early stuff that i think attracted people to monzo in the first place and the ability to pay people nearby is now almost a Sort of compulsory part of any new bank app and it seems to be becoming more and more prevalent so that competitive advantage and that uniqueness has definitely moved.

But there's still one feature the one that i mentioned their parts that is still keeping them far above the competition now confusingly. There are two very separate features that monzo do that are both called pots. There are savings pots, and then there are just the regular transactional current account buckets of money pots and those two are very, very different things. The savings parts are just essentially many ways of being able to move money out of your main current account into some form of a little savings account.

These are advertised on the monzo app they're provided by third-party providers, who pay you a rate of interest, which in most cases is not as good as you can actually go and get elsewhere, but it is obviously very convenient. The fact you can just click a few things and hopefully move money across it's not as convenient as it can be, because, ultimately, you still have to go and open an account completely separately outside of monzo, so that integration is not quite as smooth as the app Would lead you to believe, but anyway, that's that's. Not the kind of parts that i want to talk about. The parts that i want to talk about are the ones that you can have for your spending.

I've got my monzo app on my phone right now and the way that you can get into your parts is if you go and open your app and then you're able to see various different things uh about your account, your transactional spending. You can go and swipe right and left to see the various different parts. Some of them are automatically set up like the bills and the savings ones, but some are custom like if you've created one there'll, be that part right there. But if you just do a sort of on the ios app, it may work a little bit differently, uh, if you're using some other app.

If you just go and pull down you'll, be able to see all your different parts in the same space. So here i have my current account. I have these two automatically created ones, and i have this pot that i created in a previous video just to show how these pots actually work and what you can do with each pot is, you can go and add a custom photo. You can go and briefly describe what that pot is for and then what you can do is you can withdraw or add money to it.

So you can take money from your main current account and move it over to this pot, and you can then take it back out. So if you plus you can then do it, you can't move things between pots at the moment. So what you have to do, if you want to move money from one part to another, is you go and move it back from the pot that you assign the money to back to the current account and then go and take that money from the current account And move it to the pot that you actually want the money to move to. It's not a really big deal, but that's fundamentally how it works.

What you can then do is two things really one. You can use these parts as essentially mini sort of not savings. In the sense that you earn money on your savings, but just a sort of money that you set aside for a particular need. So if you need like a big amount of money in a few months time - and you know that you want to put certain amount of money into that part every single week - you can go and set up a process where you'll be able to move money automatically Into it, just click add and you decide uh how much you want and there is the option for scheduled payments.

So if you hit that you can then go and set up the particular date that you want the transactions to go out on, and you can repeat every day you can repeat every week you can repeat every month. You can repeat, however, frequently it is that you want. So that's a really nice feature for people who just want to be able to automatically uh, go and save for something big, but there's a second feature, which is the really really powerful one. Which is why a lot of people really really like this feature specifically, and that is that pots allow you to go and automatically take payments from them and you can go and apportion money automatically without you having to think about it to those spots.

So, for example, what you can do i'll show you an example right now, so i can go and create a pot. So then you go and give it a name. In this particular example, i'm presuming that we're going to be talking about paying our utility bills. So, assuming that i live in some kind of average house - and i have a monthly bill that is going to be about 100 pounds or 110 pounds on average across the year.

Am i going to say: okay? Well, i'm going to add a 120 pounds to this pot and i'm gon na schedule it to go every single month, because every single month i have to pay my electricity and i want to make sure that it comes out at the beginning of every single month. Starting from the next month, so what will now happen is that pot will now get a monthly payment of 120 pounds every single month and the beauty there is that once you've set up these types of pots for things like your rent or mortgage payments for your Utility bills for your water bill, etc. It makes it far easier for a lot of people to be able to manage their finances, because what happens then is when that date comes when the money is meant to go out, maybe that's straight after you've been paid. Maybe that's the beginning of the month, depending on how you like to manage your finances.

It is then really easy to see how much money you've got left and you don't have to worry about. You know whether your rent is going to get paid at the end of the month, because the money for that rent has already been moved out of your current account. That is a really really useful feature. The one thing that monster do not do, which somebody pointed out in a very recent comment, is: it would be really handy for you to be able to get some kind of notification about how much disposable income or disposable money you have in your current account, accounting For all the money that is due to go into these parts over the next same month, that's really my point, but on your main account part, it probably would be actually really really helpful because there's this thing that says 359 pounds left for 19 days.

That number over there does not account for the fact that i've just told it that in about two weeks time 120 pounds will actually be leaving this account. So it would be a nice feature and maybe that's going to be coming down the line, but anyway, this is how pots work. It is incredibly intuitive, incredibly useful, and if you go and look at your pots over here, you can now see this electricity bill added and you can go and create as many of these as you like, and you can do that without having to pay for on Premium accounts incredibly incredibly useful feature. Now i've been told in dozens and dozens and dozens of comments that the pots are the main reason why people are continuing to stick with monzo people say that it helps them budget.

It helps them understand how much money they've got left. It helps them not miss payments on things because they're balanced and their current account is too low. So i can see that - and i can understand that - and i do agree. That is a really useful feature, but there has been a rumor going around that styling is currently working on upgrading its own feature, which is very similar but currently is lagging way way behind.

Now you have a feature called spaces, and that feature is somewhat similar that you can go and create a new space. You can give it a title. You can give it some kind of photo and you can move money into it and then out of it um. But it really only addresses the first out of the two kind of use cases that i talked about previously, which is, if you're saving something big in a manual kind of way.

Now starting spaces feature does allow you to go and schedule those payments. That scheduling feature is not quite as intuitive and easy to use and clean looking as monzo's, it allows you to do it every day, week, month or year and that's about it, but what it doesn't do - and this is the critical thing is, it doesn't allow you To make any automated payments out of those parts, and that is the whole reason why people really like parts, that's the re that that's the budgeting element of it, because, as it is, that particular feature right now with styling only allows you to go and save a Bit of money by depositing either manually or with one of those frequencies over time, it doesn't allow you to then actually use the money other than go and withdraw it by your current account back to whatever you want or or go and move it back to the Current account at the point where you want to go and spend on the card so that money then uh is spent. So this is apparently going to change so apparently over the next few months, starting is going to upgrade that feature to essentially enable exactly the same features as what monzo currently offers, and maybe more maybe they'll enable this feature that we were talking about just now, which Automatically calculates how much money is going to go into those various pots and tell you how much disposable leftover money it is that you have in your current account. Maybe they'll allow payments directly from your current account to be automatically assigned to those parts.

So when you pay for something on your card, just like with their euro account and their pound account where transactions can automatically come out from one or the other or you can maybe within the app do something to say that this transaction should have come out of This part, those types of features, would really really go very far in completing sort of the uh the whole build that starting has been doing on their current account and match monzo in every single way, and that's the thing that i was alluding to earlier, and that Is monzo currently have one feature remaining one feature that is currently trumping all the others other than usability. Maybe the app is a bit easier to use some people. I do agree with that. It is maybe slightly more intuitive in some ways and like looks slightly nicer, but in terms of actual features.

This is the one feature remaining and if people like starling or other banks, uh go and turn up and begin replicating that feature and doing something very similar and maybe even go one step further like with some of the other functionality, then that's gon na wipe out The last remaining thing: that's keeping people with monzo and i've had a huge number of people who have literally said in comments unprompted that that pots feature is the one thing: that's keeping them with sterling. So in essence the strength that they have. This one big, really good thing about their account: they have is also their biggest achilles heel, because if other people go and match it over the next few months and maybe beat it, then suddenly that's gon na potentially trigger people to go and say, okay. Well, i don't know, what's happening with the bank, i'm not sure about their financial position, they're, not really updating anybody on that financial position, despite the big news that came out in the summer, they're not releasing any quarterly reports or monthly reports like they used to release Before that um they're, not really keeping people up, they've got a blog that talks about generic stuff that nobody's really interested in so should i stay with them? Should i go and switch to sterling or any other bank of your preference? I have a feeling that, if that was to happen, there could be a really interesting dynamic in that a lot of people who do use the accounts properly, as in they use the accounts for actually putting a salary in and having their debits.

And all of that kind of stuff those people may actually begin switching over to styling, because suddenly the feature set in styling is going to be better in every single way. Maybe the people who use monzo as just a spent card, which seems to be a large proportion of their customers, so they just load it with some money to spend when they go out or you know for some particular needs like when they go shopping and maybe Those people will not, because they don't really necessarily care about the pots feature or most of the other features for that matter. They just care about the card being very nice to use and pretty and easy to kind of load with money, so that probably won't affect those people. But it is also the case that those people are the ones who are not actually making monzo any money, because they don't have that big relationship that the customers who have their full banking kind of going through monzo.

Anyway, if you disagree with this opinion, if you have something to say, please go and leave a comment below i'd love to hear your thoughts. If you like this video, please make sure you go and smash that, like button for youtube algorithm, it is so so incredibly important for me to be able to get this video out to more people for me to be able to reach more people and grow. My audience that's kind of like why i'm doing these videos on youtube to try to reach more people and help more people with personal finance stuff. If you want to go and watch more personal finance, videos, videos about bank accounts, credit cards, all about managing your money and making more money and doing more with it make sure you subscribe to this channel, make sure you go and hit that bell.

Next to the subscribe button, so you get notifications. I know that the vast majority of you do not hit that bell, and that means that whenever i release my videos, you wouldn't actually know that i've released them in many cases, so go and hit that bell and that's how you'll know that i've released a new Video thank you so much for watching. I really really appreciate it and i'll see you guys later. You.

.