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@JonoMarshall
Challenger (and traditional) banks make money by getting a share of the ~2% in-store transaction processing fees, or the ~2.5% online transaction processing fees. It's not a small sum and is why they want to have your current (active) account and not just your savings account(s).
Cashback on spend deals could work in the UK (like in the US), but the margins are tighter over here. That is Curve's business model (or the many expense cards now on offer).
Monzo (and all banks) need consumer spending to go up to start getting that revenue stream again... it will probably take some time. UK consumers continue to spend less across all categories* right now (and the sentiment isn't changing).
(*) With the exception of 'groceries' as we're now eating at home more perhaps?