UK-based neobank Monzo has introduced three app-based security features designed to protect user accounts from criminals even in the event of phone theft.
The new security tools are designed to prevent criminals from transferring or withdrawing money from Monzo accounts by providing an additional layer of protection, and the digital bank plans to officially launch them in the coming weeks.
First, the new Known Locations feature allows customers to specify a specific, safe location (such as their home or workplace) where they must be when transferring funds above a certain limit.
Monzo plans to use tracking technology to determine whether a customer's phone is in one of the selected locations and block any transactions that are outside that range.
Customers can also appoint a trusted friend or family member who also has a Monzo account to verify bank transfers or savings account withdrawals above a certain limit.
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The Trusted Contact can view some of the transaction details and report any suspicious activity to the bank. Monzo will hold the transaction until the Trusted Contact confirms it is safe.
This is what the Trusted Contact feature looks like. Image credit: Monzo
Finally, Monzo users can receive a secret QR code that they can either print and save or store digitally on another device, and then scan the code using the Monzo app to confirm large transactions.
Monzo says the new features are a first for mobile banking, as the industry struggles with a worryingly high risk of fraud.
Founded in 2015, Monzo quickly rose to popularity with its mobile-only banking services. The startup achieved unicorn status in 2018. The company faced financial challenges and significant losses in 2020 and 2021, but ultimately recovered.
Monzo said it became profitable in 2023 and now has a total of nine million users in the UK. In March, it raised £340 million in new funding, reaching a post-money valuation of £4 billion, and reportedly secured a further £190 million in May.
