Monzo saw losses balloon last year after its banking ambitions led to a 336% surge in operational costs.
The digital challenger logged pre-tax losses of £33.1 million in the year to February 2018, having widened from just £7.9 million a year earlier.
Monzo said this was primarily the result of a major rise in operating costs from £8 million to £34.9 million, which reflected investments in becoming “a fully operational bank”.
The company began offering current accounts last September, and has since fully phased out its pre-paid cards.
It also introduced overdrafts, which has been taken up by around 37,000 customers, and lifted revenues.
Interest income came in at £150,000, having been nil a year earlier, while fee and commission income rose to £2.2 million from £112,000.
Chief executive Tom Blomfield said: “Moving to current accounts has given our customers access to all the power and protection that comes with a full banking licence.
“But it’s also helped us begin to address our next challenge: profitability.”
Its former pre-paid cards were costing around £65 per year to host as of last September, with Monzo being hit by third-party charges to process its payments while allowing users to top up accounts from other debit cards.
It was also absorbing ATM costs for cash withdrawals that customers made abroad and was “investing heavily” in customer service.
Running on its own technology lowered costs, as did forcing customers to make bank transfers or pay salaries directly into their accounts rather than top up via debit card.
The bank is now running accounts for £15 each, £10 of which is going towards customer support.
Customer support costs will be cut further by helping staff “work more effectively with better tools and automation”, the bank said.
Monzo employed around 183 staff on average over the period, up from 47 staff a year earlier, all of which were in management, operations and administrative roles.
It said the total team has now grown to more than 300 people.
Staff costs also rose to £9.2 million from £2.5 million, though its highest paid director – which the annual report did not name – saw their total pay package jump from just £60,000 to £305,000 in the year to February.
The digital bank said around 60,000 people were opening new accounts each month, with one million customers likely to be reached within the next few months.
Around 750,000 are currently using Monzo’s current accounts.
“By the end of 2019, our goal is that several million people in the UK will be using Monzo,” Mr Blomfield said.