Intro

At Monese, credit remains the most requested feature by our customers, particularly ​among the near-prime segment—a group that is both large and underserved.

In the UK alone, there are an estimated 10-14 million people who face challenges ​accessing credit through traditional financial institutions (PWC, 2018).

These consumers often share certain characteristics:

• they may have a thin credit file due to limited borrowing history
  
• a mildly adverse credit history (such as a few missed payments)
  
• incomplete records from an inconsistent address history.
  

Notably, 84% of Monese customers are either ‘credit invisible’ or have a poor credit ​score. Of these, 47% are classified as ‘credit invisible’, indicating a significant ​opportunity for growth, as we currently capture only a small portion of this market.

Customer problems to solve

Problem 1: Credit visibility

Customers can’t get access to the credit products they need because of thin credit files ​or poor credit scores.

Problem 2: Knowledge gap

Customers lack knowledge on how to improve their access to credit.

Problem 3: Cashflow

Unexpected expenses or dips in income push customers into exploitative lenders.

Problem 4: Mobility barriers

Customers who are prime in their home country struggle to prove they are ​creditworthy in their new country, which punishes mobility.

Our vision

Unlock credit for the millions of subprime and credit invisible who struggle to get credit ​by smashing traditional barriers to credit worthiness.

Empower our customers to achieve their goals by giving them the knowledge to ​improve their understanding of credit and the tools with which to take action.

Breakdown international barriers to mobility by allowing customers to passport their ​credit history from one country to another.

Serve our customers with the right products by using machine learning to anticipate ​their needs and offer pre-approved solutions in real time.

This challenge is what motivated me when I joined the credit team. Together, we ​developed a suite of features specifically designed to address these issues and help ​more customers gain access to affordable credit.

Salary advance (Early Bird)

Problem:

Due to cashflow issues our salaried users are taking up payday loans with high APRs.

Solution:

Provide salaried users with an alternative method of managing cashflow other than ​taking a loan. Users can draw down on their actual pay for a fee.

Benefits:

1. Provides an alternative to cheaper alternative to high APR payday loans.
2. Improves our users financial wellbeing
3. Not a loan so there is no APR

Monese Benefits:

1. Attract more salaried Monese users
2. Helps our Credit Risk team better understand our user’s credit behaviour/profiles

Personal Loans

Problem:

A portion of our UK user base have recurring cash flow issues that require them to ​manage with high APR, short-term loans. In addition, 16% of our UK users who have ​good credit scores also want access to longer-term loans, which they currently can’t get ​through the Monese app.

Solution:

Provide a solution to enable our UK customers to get access to affordable short-term ​and long-term loans at affordable APRs (APR < 60%).

Benefits:

1. Access to credit
   
2. More lender choice
   

Monese Benefits:

1. Allow us to generates revenue with limited risk
2. Helps our Credit Risk team better understand our user’s credit behaviour/profiles

This was our first and main credit product, designed to enable Monese users to apply ​for a loan directly through the app with ease and convenience. With this feature, we ​aimed to provide accessible financing options to our customers, particularly those who ​have previously faced barriers in obtaining loans from traditional banks.

The process...

When we began developing the loan application process, our primary goal was to ​ensure that customers could complete their applications seamlessly from start to ​finish—all within the Monese app. We streamlined the process by breaking it down ​into three core sections, focusing only on the legally required questions. This not only ​simplified the application but also made it far more digestible for the customer.

To enhance the user experience, we displayed one question per screen, categorizing ​them into three meaningful sections:

1. Contact details
   
2. Employment
   
3. Expenditure
   

We also ensured that from the very beginning of the process, we clearly ​communicated how long the loan application would take and what information users ​would need to complete it. By setting clear expectations upfront, we aimed to reduce ​any potential frustration and build trust in the process.

Additionally, to further smooth the process, we pre-populated certain fields with ​information already available to us, such as personal details, reducing the time and ​effort required from users. We also incorporated a progress bar at the top of the ​screen, ensuring that customers always knew where they were in the application ​journey.

User testing

To validate our approach, we conducted early user testing, gathering valuable feedback ​directly from our users.

We focused on testing the flow for applying for a loan. The test began from the Home ​screen, where users initiated the loan application process, and continued through a ​series of questions, all the way to the final application results.

Before the final release, it was important to ensure users could complete the entire ​process in under five minutes. We also aimed to identify which sections were the most ​challenging for users and gauge overall reception.

What we learned from User Testing

The positives

✅ The level of questions felt appropriate: All participants were comfortable answering all the ​questions presented in loan application.

✅ It was quick and easy to apply: All participants felt the application was very easy to complete ​and were positively surprised about how quick and easy the process was.

✅ Visual progress was good enough: All participants noticed the progress bar at the top and ​felt it didn’t positively or negatively impact their application.

✅ The order of questions made sense: All participants found the order of the sections logical

The negatives

👎 The save and exit option wasn’t clear: Participants didn’t understand that closing the ​application would save it.

👎 It wasn’t clear that the loan was provided trough a broker and not by Monese.

👎 People would have preferred to be provided more financial education about credit and loans ​before proceeding., as well as a loan calculator.

👎 There were some concerns about tapping on “Self-employed” as it might mean there’s a ​need to submit taxes returns.

What we learned after launch

The numbers

• 20k users who saw the new feature
• 28.6% overall completion rate
  
• 73.5% application from completion rate
• 80.3% drop off of users after intro screen
  

Turning feedback into actions

We shared the results with the wider team and incorporated the feedback to further ​enhance the loan application process:

• We launched an A/B test with two variants of the intro screen, with the second ​version reflecting insights gathered from both qualitative and quantitative ​feedback. One key change was reducing the amount of text on the screen to make ​room for more information about our broker, which users had previously found ​unclear.
  
• Additionally, we updated the “What you’ll need to get started” screen to include ​details about the requirement for a UK phone number, which had been a barrier ​preventing some users from completing their loan applications.
• To improve the overall experience, we also introduced a loan calculator before ​users started the application process, along with more educational content about ​credit and loans.

These enhancements made the process more transparent and user-friendly, addressing ​key pain points identified during testing.

Other ideas

We also considered adding a customer happiness survey to gather direct feedback ​from users about their loan experience. This would allow us to continuously monitor ​user satisfaction, identify potential areas for improvement, and ensure that we’re ​meeting customer needs effectively.

Final numbers

• 74.8% drop off of users after intro screen
  
• 80.6% application form completion rate
  

The drop-off decreased by 5.5% (from 80.3% to 74.8%), while the application form ​completion rate improved by 7.1% (from 73.5% to 80.6%).

Credit Assistant

Problem:

Only 18% of the 49K users were accepted for a loan as they were labeled as ‘Not ​Available’ & ‘Very Poor’ metrics. This in turn makes it very difficult for them to access ​affordable credit.

Among the findings of a major survey of UK personal finances was the statistic that ​about 16% of UK adults are credit illiterate - they don't understand how to

build their credit scores.

Solution:

Provide our users with a solution that will enable them to not only understand the ​factors impacting their credit score but also improve it.

User Benefits

1. Visibility / Improve credit score
   
2. Unlock credit at cheaper rates
   

Monese Benefits

1. Improves user retention
   
2. Increases daily/monthly active use
   
3. Advanced features could be monetized (i.e., Credit Score Alerts)
   

The design of the credit checklist was driven by our goal to create an engaging, ​actionable tool that helps customers improve their credit score. Rather than offering a ​simple, dry list of tasks, we chose to make the checklist interactive and informative.

Each item on the list includes a clear explanation of how completing that task can ​positively impact the customer’s credit score. Additionally, we integrated direct links ​within the checklist, allowing customers to immediately take action, such as setting up a ​direct debit or reviewing their spending.

This approach not only educates users on how to improve their creditworthiness but ​also makes the process seamless and engaging, ensuring that the experience feels more ​interactive and user-friendly.

Conclusion

Launching these new credit decisioning features has proven to be a crucial step in ​empowering the ‘credit invisible’ customers.

By utilizing alternative data and credit reference agency information, we’ve been able ​to offer small initial loans, allowing these customers the opportunity to demonstrate ​their creditworthiness.

As a result, many have successfully improved their credit scores, while also gaining ​access to more affordable credit options. This has not only strengthened customer ​engagement but also provided Monese with a competitive edge by refining our internal ​credit risk models and better serving a traditionally underserved market.

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