Australian neobank Xinja pulled the plug on its banking operations in December, after failing to develop any revenue-generating products to offset its spiralling cost-base.

Long says that Monzo, having woken up last year to this predicament, is struggling hard to get out.

“For Monzo, the problems are only slightly different - though not much better. By creating a leading current account product that generates practically no revenue, either from merchant or marketplace fees, its business has become an increasingly expensive charitable cause for the UK market.," she says. "Moreover, while the bank has raised $717m of capital to help fund new products and cover a potentially lucrative US expansion, the result is annual losses of around £100m ($131m) that need to be dealt with now.”

Monzo’s response is to monetize with a range of premium accounts, combined with new restrictions on the free, basic version. However, with little appetite from UK consumers to pay for banking - and with Monzo not legally able to charge for accounts in the US - this direction seems misconceived, believes Long

Long adds: “While Monzo has done well to attract and engage with its customers, it threatens to throw that away by not concentrating on the essential. Instead of trying to sell what was once free, Monzo should focus on unit economics, bringing out and making the most of revenue-generating products such as loans and wealth services.

“The bank should also learn from the likes of Chime in the US, a company that has given low-income customers the tools to help them manage their money easier on conditions such as using their cards or receiving their monthly pay. Failure to learn from these examples will condemn Monzo to the same fate as Xinja.”