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Mondo is the latest digital bank to gain a licence as the number of smartphone lenders gathers pace, paving the way for competition in the UK current account market.
The bank, which is built as a mobile phone app, will focus on current accounts and digital services, interacting with customers by sending notifications and providing instant balance updates, writes Emma Dunkley.
Mondo’s regulatory approval comes soon after digital rivals Starling and Tandem received the green light to launch. Atom became the first app-focused bank to open its doors in the UK earlier this year.
The digital lenders are mobile banks that offer users the opportunity to control their finances from their phone, rather than needing to visit a high street branch.
Their advent comes as the competition watchdog seeks to improve the current account market, which is dominated by large high street banks.
The Competition and Markets Authority ruled on Tuesday that banks must open up customer data so that it can be shared with their consent so third parties can provide them with the best current account deals.
The CMA’s measures should boost the rise of new digital banks such as Mondo that focus on helping customers manage their finances.
Mondo, founded by Tom Blomfield who was formerly chief technology officer at Starling in 2014, is now in the “mobilisation” phase, allowing the bank to secure further investment and bolster its IT systems before launch.
Earlier this year, Mondo raised £1m from a crowdfunding platform in just over 90 seconds. The bank has gained about £7m from venture capital company Passion Capital.