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Monzo is a bank aimed at people who spend a lot of time with their smartphones, and for those who
like to get things done in a click and do not see the need for branches and check books. "We're
focused on building the best current account in the world and ultimately working with a range of other
providers so that Monzo can be an intelligent hub for your entire financial life," said Blomfield at the
AWS London Summit
2016 in July, explaining how it is
possible to build a bank from scratch and run it on the AWS cloud platform. Blomfield said they started Monzo "because we believe that banking can
be better. We're tired of hidden fees and charges, endless paper forms, and nothing quite working in
the way we'd expect. So we're trying to build a bank that we'd want for ourselves, our friends, and our
families."
Monzo has applied for a full banking license and the process is due for completion in the second half
of 2016. Once it acquires the license, customers' money will be protected by the U.K. Financial
Services Compensation Scheme (FSCS) under which up to £75,000 is guaranteed by the U.K.
Government. Currently, Monzo is live with limited-edition Alpha and Beta cards (Monzo MasterCard
Prepaid Debit cards) that can be topped up and used at cash machines, in-store, online, and at
contactless terminals. All card transactions are processed by the MasterCard network and protected
by MasterCard rules.
During this testing phase, Monzo has assured customers that their money will be held in a separate,
protected account by Wirecard, its issuing bank authorized by the Financial Conduct Authority (FCA).
Challenges and Solution
Monzo's team was clear
from the start that it want
ed to leverage 3rd Platform technology pillars (cloud computing, Big Data analytics, mobility, and social enterprise) to build its digital banking business. It
wanted to use technology as an advantage and break away from mainframes, massive centralized
ledgers of all transactions, monolithic applications, and traditional datacenter architectures. In IDC's
opinion, banks that build large "snowflake," heavily customized applications and spend billions on
maintaining those custom applications have to overcome more budget and organizational hurdles to
digitally transform their services.
The Monzo team deliberatel
y stayed clear from the tradi
tional approach of a monoli
thic banking
system. The standard way banks build their core system is to get a set of developers and build an
application which then gets bigger as business scales. Then the business adds some more database,
search, and caching, and builds integration for everything and eventually ends up with a huge custom
application that is the critical backbone of the business. The engineering efforts and investment in the
monolithic application that is central to the business force banks to dedicate large portions of their IT
staff and budget just to maintaining it, rather than building new revenue-generating platforms.
Go Microservices Framework
Monzo's team decided that breaking the core banking application into microservices was the best way
forward. In IDC's opinion, microservices as an architectural approach draws on long-evolving
experience in software engineering and system design, including the service-oriented architecture
(SOA) efforts of the past two decades. But primarily, it is an architectural approach to system design
that requires considerable organizational and cultural adjustment to execute successfully
. Having
small components that can communicate synchronously or asynchronously and are event-driven
enables the business to break away from monolithic apps and have a future-ready IT architecture. The
basis for building these is simple: every service needs to have just a single function and execute it
efficiently and securely. This means the application components have only a few hundred lines of
code, so they are easier to understand, manage, and tweak. Monzo's team also made sure the
microservices are oriented around areas of business (i.e., tagging the microservice component with a
specific business goal) so it is easy to understand and new developers can replace it with better
functionality quite easily. The application components also use protocol buffers for well-defined
interfaces.