Monzo has reported both annual losses and admitted a data breach, in a challenging few days for the digital-only challenger bank.

After pointing out that it spotted the Ticketmaster data breach last week – spotting a spike in account fraud back in April – Monzo itself fell victim to a hack which saw the personal details of around 20,000 customers stolen from third party survey firm Typeform.

The vast majority of the customers affected had just their e-mail addresses exposed, but a smaller number also had additional information, such as postcodes and names of previous banks, taken.

Monzo said that the attackers found a weakness in Typeform’s security, gaining access to data backups for surveys conducted before 3 May 2018.

“At the moment, we’re focused on letting affected customers know what’s happening, and we’re informing the Information Commissioner’s Office as soon as possible,” explained chief executive Tom Blomfield. “We’re also ending our contract with Typeform, at least until they can prove they’ve improved their security, and have deleted all customer data from their servers.”

Blomfield also promised to remove all survey data from any provider within two months of the survey in future.

Meanwhile, Monzo’s annual report revealed that losses for the year before tax were £33.1 million - up from £7.9 million in 2017 - primarily as a result of an increase in operating costs.

Costs increased by £26.9 million to £34.9 million during the current year – up from £8 million in 2017 - as a result of investment in banking operations.

While the number of user soared to 750,000, customer deposits stood at just £71.2 million, equating to less than £150 per account.

Blomfield said Monzo was working to lessen the money lost on each current account, with a goal to break even on each new customer very soon, before reaching overall profitability as a business in the future.

“We’ll work to lower the cost of providing customer support, while making sure the service stays world-class - we’ll do that by helping our staff work more effectively with better tools and automation - and we’ll reduce the number of questions coming in with a smarter help screen that lets customers find their own answers faster,” he stated.

“We’ll also work to generate revenue through lending,” Blomfield continued. “We started making overdrafts available in January, and around 37,000 people have now enabled them. Over the next few months, we’ll build new features that let people borrow in ways that are convenient, transparent and affordable.”

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