No obvious forum category for this, so feel free to move, but Dozens is hitting the media. This is a good write up:
I notice the articles I’ve come across all start with this 5%. That’s not what attracted me to Dozens. It was far more about the way the service was described, the awesome fee structure and the feeling that this company understood what was not great or thical about some other banks and services.
So I hope the media get onto to that too. I think there will be a lot of challenger bank customers out there becoming disillusioned at some of the practices of other providers.
Hey Mike, this line has been thrown around so many times on the fintech forums, so I don’t want you to think it’s mine… But, it certainly holds true here.
“Challenger banks (including dozens), are not looking to take customers from other challenger banks - They are looking to take customers from the high street banks and convert them to a challenger bank”.
I could be wrong here, and I’m sure this won’t be dozens’ official line, but the budgeting features, app experience and everything else (outside of the bonds), are all things you can get (to a degree) in your Monzo, Starling or N26 account amongst others.
The 5% bond is a great eye catcher for high street bank customers to experience a challenger bank, and dip their toe in the water.
It’s the best selling point I’ve seen out of all of the fintechs since they launched.
If anything, it’s almost too good because people will dismiss it as “too good to be true”, as they tuck into their 1.5% Marcus savings account.
Anyway, just my 2 cents
Hi Nick. Good point. Makes sense as there are plenty of potential customers who still have not discovered challenger banks.
I think there is an exception here though. A few of the challenger banks I have learned more about (N26 being one of them) have ethical issues or have implemented terms or practices that rival the negative side of high street banks.
A year ago I was a big advocate of alternatives to high street banks. Now that’s changed to ‘bad practice’ banks. Three of those are challenger banks.
For example, if a friend who was not a great money manager asked me recommend 3 banks, right now Dozens would be first, and a high street bank I returned to would be second. Third would be ‘see one or two’.
You may be right, but I think once some customers realise some challenger banks are adopting unethical methods to make money, I would love to see those switch.
We’ve had some great coverage recently in a number of places - I should remember to share it here occasionally (for interest).
There is, of course, also plenty scepticism out there. That is to be expected and we are trying to respond to it where we can with as much honesty and transparency as possible. It doesn’t always work, so it is also fair to share these with you too (oh, and thank you to those of you who’ve shared links with me too. Really appreciate it).
An example today was an article in ThisIsMoney (link below). The journalist approached us with perfectly good questions and asked for written replies, which were sent (please see edit 2) but don’t seem to have been included.
I’m a journalist at This is Money writing a piece about dozens based on all the adverts I’ve seen on the tube, and hoped you wouldn’t mind answering a few questions?
We’re particularly interested in the fixed-rate bonds and the protection around them. You’re listing the bonds on Nex, but can you offer any insight into the type of companies you will be investing in, as 5% is an eye-catchingly high rate of return. Also, you make the comparison with US Treasuries but surely it’s a different world now and you’d admit that the investments are risky in order to achieve that rate of return?
On the subject of risk, you talk about how the rates are fixed and there is FSCS protection and funds are held in a separate trustee account – but if the companies you lend money to go bust will customers get their money back? For example – if I were to put £10,000 in these fixed-rate bonds would I get all that back if companies were unable to repay the money they had borrowed? If not, do you not feel this is worth mentioning on the adverts?
Our 5% fixed interest bonds are not invested into any companies or other investment products, but are a super safe product Dozens has manufactured and offers solely for the purpose of rewarding small savers.
Found in the ‘Save’ section of our app, the 5% p.a. fixed interest ‘Trust bonds’ are our first proprietary financial product, designed to bear practically no risk. With this bond Dozens deposits the money invested by our customers plus the promised interest, into a separate trustee controlled account (where we can no longer touch it).
How are we able to do this? By simply treating the 5% as a cost of building an entire offering around savers. Why? Because we believe in the importance of having a high interest product for people who are just starting to save and experience interest, which is why we’re willing to fund this product from the revenues earned from our other products, eg interchange, FX, custody fees etc.
I think that is relatively clear, but you can judge for yourself whether it was incorporated into this review:
We will continue to try to explain how and why we do what we do, and try to build trust by being open and honest.
EDIT 1: if any journalist out there wants to chat, we are always happy to talk but since we also travel a lot we might need some chance to respond when, as in this case, the key people are 8 hours behind us in California.
EDIT 2 (7/3/2019): I would like to clarify that the email exchange above was after publication - something I was not fully aware of that when I posted. I do apologise for that. However, the journalist had reached out and we did respond with an offer of a quick interview to answer his questions because the people involved were travelling, which he apparently declined, so this article was published without any correction or input from us.
The good news is that they’ve apparently made some corrections to the article after the community feedback, which is good. We are still very keen to have a proper, open conversation with this journalist (or any other to be honest) about how the bonds work because the information is still not right.
Always happy to talk
Daily mail news article
This feels very Daily Mail like. Ignore the facts just work on the sensationalism.
In that case I don’t understand why you’re using bonds here at all. If you want to pay users 5% interest on their savings, why not just pay them 5% interest on their savings?
It was mentioned earlier. You need an additional license to do this, Dozens do not have it yet but are working towards it.
Either way it’s essentially the same mechanism, whichever way the interest is paid.
Could you please share the link with me?
I can’t seem to find it myself now. Which makes me think it might have been in one of the last Ask AC’s on YouTube?
If I remember where it is I’ll pop it across.
It’s in one of the older trailblazers threads, here
For those not in the trailblazers group, these are some quotes from Rob:
we do not pay interest on a balance, in part because we are not a bank. These two things may both change in the future!!
Anything involving interest on deposits will come after a banking licence.
For now the fixed interest Trust Bond is our available solution, but we are working on more FSCS protected term savings products already.
In case it interests you, we are also trying to see how we can provide access to uk treasury bonds for small savers
Just see this in the daily mail wrongly saying that your unable to withdraw cash!!
Yep, that article was mentioned over here. There are several issues with it.
Do us a favour and point these factual errors out to the journo in question as well guys - appreciate the teamwork.
We will be taking the high road and advocating transparency, putting the article up on our site as well, but always good to have fact checks, especially from our users! Honesty should be a two way street.
Thank you everyone for your support and alignment with the cause.
Just had a nice chat with Simon, This is Money’s Editor and think the facts are cleared up now, so we should see an update soon.
To be clear, am personally committed to absolute transparency and being open and accessible at all times. In fact, as a young fintech trying to innovate in a space that sees lot of potential for abuse of retail investors, absolutely happy to have a higher bar held as well.
Simon and I are aligned in our interest of good clear comms, but in this case a long flight coincided with their publishing timelines, causing some confusion.
Hopefully all water under the bridge now.
That’s good to hear