• Thursday Jul, 04, 2019

What Are Digital Challenger Banks?

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You may have heard of ‘challenger banks’ or ‘digital banks’. They are disrupting the normal banks and making us think of banking in a new way. But what are they?

Challenger banks are relatively small and typically digital banks set up that compete with long-established banks. It’s as simple as that!

In the past year, challenger banks have started to gain momentum, but still, only around 9% of consumers are aware of digital-only banks.

Digital banks have made banking more accessible but what are the most popular digital banks?

ATOM BANK

Founded in 2014, Atom bank is the first digital-only bank with a full banking license. They offer business loans and provide a simplified step by step approach on how to apply, even assisting in finding a broker. 

Although they have no physical branches, they have a customer service support team which customers can access 24/7 through email, app chat, social media or phone. Low overheads mean they are able to offer competitive rates.

Atom bank is authorised by the prudential regulation authority so customers are even protected by the FSCS. 

They offer fixed savers accounts with competitive interest rates, allowing you to passively increase your savings. Atom bank also offers mortgages which you can manage through their app. 

MONZO

Monzo has been operating as a fully-fledged bank since April of 2017. They offer current accounts, with perks such as shared tabs (allowing you to easily split bills), saving pots (with the ability to earn 1.55% interest) and overdrafts. 

Monzo allows customers to use their cards abroad with no fee or cap. Plus, you don’t need to tell them in advance you’re going abroad.

Monzo is also authorised by the PRA and therefore protected by the FSCS.

Although Monzo does not currently offer new accounts for businesses. You can register your interest in their digital banking services via the website. 

MONESE

Having launched in September 2015, Monese is a digital bank which allows expats and immigrants, who would usually be restricted by requirements and residency constraints of high street banks, to open a bank account. All customers require is a smartphone and an EEA address. 

They provide low-cost international money transfers which many banks (digital or not) don’t. For £9.95 a month, customers can access the features of a UK business account and a plus personal account. This is accessible in twelve languages, within the Monese app. 

Monese customers are protected by the FCA. Although, Monese customers are not protected by FSCS which may prove financially risky.

STARLING

The initial idea for Starling came about in January 2014. Since then, Starling has received recognition as the Best British Bank the Best Current Account and Best Business Banking Provider 2019. 

Starling offers both personal and business accounts. The business account can be integrated with Xero. This allow the accounting software to access your transaction feed instantly. It saves you time and money. To add to that, they also provide spending insights including categorised transactions. 

Starling provides hassle-free travel spending. Any unauthorised charge fees are capped at £2 a month. You’re also protected by FSCS. 

As a small business you can benefit by switching to digital banking. Not only can you save money but also valuable time. 

Get in touch today to discuss how we can help you open or switch to digital banking so you can gain from the benefits mentioned above. 

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