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What is a Monoline?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 27 August 2016
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    2003-2016
    Conjecture Corporation
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A monoline is any type of business that focuses its efforts on the delivery of one particular good or service. The term is most commonly applied to companies that offer financial services to their customers. With this type of focused support, a monoline normally delivers a high level of expertise in its specialized area that is difficult for businesses that offer multiple products to equal.

There are several distinct advantages to working with a monoline. One of the main benefits has to do with the knowledge that the focused business enterprise can offer its clients. Because there are no distractions with ancillary products, the level of skill and expertise with the sole product is highly developed. This means that representatives of the monoline are likely to provide customers with information that may or may not be available from similar companies that do not specialize.

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Security for customers is a second advantage associated with a monoline. The focused support makes it possible for the client to have all information that is needed to make an informed decision on hand. This in turn increases the chances that the customer will choose a product that will meet his or her needs, and thus lead to satisfaction. In situations where the customer is making some type of investment with an eye toward earning a return at some future point, this level of information flow is extremely important, since it can help the investor identify a good prospect, while also avoiding those investments that may not be quite as good as they initially look.

Enhanced customer care is another benefit that is associated with a monoline. The focus on a single product means that customer service and support personnel are trained to not only respond to customer queries and concerns, but also to anticipate customer needs and wants, and proactively meet those needs. This approach can often help the customer to save a great deal of money, as well as minimize the amount of time customers spend on assessing and researching ways to meet those needs.

One example of how a monoline works can be found in the field of insurance. A monoline insurance company provides a level of financial protection that is difficult to achieve in any other manner. An insurance provider with this type of focused support for customers offers guarantees that are usually structured as credit wraps. These credit wraps essentially minimize the risk to investors by insuring investments such as mortgage-backed securities and bond issues in the event that the security fails for some reason. For the investor, this means that even a relatively safe investment, like a bond issue, is made even safer, and thus increases confidence that the investment will earn a return at the point of maturity.

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