UK challenger bank Monzo has taken additional steps to protect the business against the pandemic-induced financial downturn. And it’s not alone.
The FinTech unicorn has revealed that CEO and co-founder Tom Blomfield will not take out any salary for the next 12 months, that the board and other employees have decided to take a 25% pay cut and that a number of its UK employees will be offered voluntary furloughing for two months, according to a memo seen by TechCrunch.
The UK government has, among its measures to fight the spread of the virus, given employers the option of furloughing their employees. Employers can claim back 80% of the furloughed employees’ salaries for the duration of their absence from work.
Starling Bank has reportedly also taken advantage of the government scheme to furlough 41 people. Revolut reportedly told TechCrunch it has no intentions as of yet to furlough its staff.
The news about Monzo’s new measures to protect the business comes after it and many other FinTech ventures have seen their revenues drop as a consequence of people spending less money both domestically and abroad. Monzo has also suffered a downturn in account signups.
While Revolut has not furloughed any employees as of yet, founder Nikolay Storonsky has said that the company is doing everything it can to cushion the fallout of this crisis.
“The last weeks have been tough everywhere so I’d like to start this message by sending my best wishes to you and your family,” Storonsky recently said last week. “You have my word that we are doing everything we can to support our customers at this challenging time.
“The coronavirus pandemic is causing unprecedented movement in financial markets. Naturally this can be alarming and can allow rumours and false information to spread quickly. To put your mind at ease, I’d like to make Revolut’s position super clear.”
He then outlined that many of its staff members were working remotely and that they were still more than able to support their customers.
The steps taken by both Monzo and Sterling Bank build on the measures FinTech Global reported that they had taken two weeks ago.
Back then, Sterling Bank told us that even though it did not have any physical touch points with customers thanks to it being a digital bank, it had still trialled a rotating system where half of its workers working remotely half of the time.
“We’re following guidance provided by national and international health agencies, including for employees who are unwell and/or have travelled to affected countries,” a spokesperson told FinTech Global. “We’re stopping travel between our offices, ensuring that employees stick to one floor in the buildings and holding meetings with external participants by video link and phone, rather than have visitors to the offices. All policies are under daily review.”
Those comments were given before the UK government put the nation under lockdown on March 23 to reduce the spread of the virus. As part of that, everyone except essential employees – which includes banking workers – have been told to self-isolate and only come out once a day for exercise, but then only by themselves or with members of their household. British residents are also told to avoid going to do their grocery shopping as seldom as possible and to practise social distancing.
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