July 24, 2024
Neobank Monzo unveils new anti-fraud features in case of phone theft

UK-based neobank Monzo has unveiled three app-based security features, aiming to safeguard user accounts from criminals even in the case of phone theft.

The new security tools are designed to prevent criminals from transferring or withdrawing amounts from Monzo accounts by offering an additional layer of protection. The digital bank plans to officially roll them out over the coming weeks.

To begin with, customers will be able to use the new “known locations” feature to indicate a specific, safe location (like their home or their workplace) where they need to be when moving amounts of money over a certain limit.

Monzo will use tracking technology to identify if its customer’s phone is in one of the selected locations and block any transactions that fall outside the scope.

Customers can also designate a trusted friend or family member, who also has a Monzo account, to double check bank transfers or savings withdrawals over a certain limit.

The trusted contact will be able to see some of the transaction details and flag to the bank any suspicious activity. Monzo will put the transaction on hold until the trusted contact confirms it’s safe.

Monzo Trusted Contact Feature
What’s the “trusted contact” feature looks like. Credit: Monzo
Monzo Trusted Contact Feature

Finally, Monzo users will be able to receive a secret QR code either to print and save or to store digitally on another device. Then, they can scan the code with the Monzo app to confirm large transactions.

Monzo says the new features represent a first across mobile banking, as the industry is grappling with dangerously high levels of fraud.

Founded in 2015, Monzo’s mobile-only banking services quickly gained popularity and the startup achieved unicorn status in 2018. The company navigated financial challenges and significant losses during 2020-2021 but ultimately rebounded.

Monzo said it became profitable in 2023 and now counts a total of nine million users in the UK. In March, it raised £340mn in new funding, reaching a post-money valuation of £4bn. It reportedly secured an additional £190mn in May.

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