UK Challenger Banks looking to cash in on traditional banking decline

by Startacus Admin

Trust in traditional banking has long been in decline. Here's a list of UK Challenger Banks and associated fintech services looking to cash in on traditional banking decline...

Trust in traditional banking has long been in decline. They make their money from our lack of it, from our debts and struggles, and they often invest that money in ways we may not approve of (billions in the arms trade, for example).

Over recent years, ‘challenger banks’ have been sprouting up to challenge, appropriately, this traditional banking system. We have been writing about some of these as they appear, but we thought it was time to put together a longer - but not exhaustive! - list of these challenger banks and associated FinTech services. So...here it is, in no particular order.

Monzo - Monzo is the bank account that lives on your smartphone, and is based on a platform of transparency and solving problems. Your balance and spending breakdown is always within arm’s reach.

Metro Bank - A simple to set up bank account, with no monthly fees or minimum balance, that gives you free transactions within Europe. Metro Bank has high street branches and their dedication to keeping charges and fees simple and transparent had them named 2018’s Best Current Account Provider by Moneywise.

Atom Bank - With packages designed to be simple and straightforward and, they say, cheaper because they don’t have to spend on branches. This, too, all happens on your smartphone and you have live access to unfiltered reviews through Trustpilot.

Chip - This one is a companion to your bank account, which you provide with read-only access to the transactions in your account. The app will analyse your habits and calculate how much you can put into savings. It will then transfer £1-100 up to 6 times a month into a Chip savings account held with Barclays. Chip was a startup of the week last year on Startacus. 

Countingup- Countingup is the first UK challenger bank to focus on the 4.5 million sole traders, freelancers and contractors; and the first to promise plug and play accounting built in. Business owners can also do their bookkeeping, view a profit and loss report, and attach receipts to expenses in-app. In September 2018 Countingup raised £2.3m in seed round which we wrote about. 

Monese - Monese allows anyone to easily open a current account in minutes, for free, with no barriers. At the moment, Monese can be used by anyone living within the EEA. There is the free account or one with a small monthly fee that gives you a debit card and reduced fees for foreign currency exchange. Monese was a startup of the week on Startacus in May 2018.

Revolut- Revolut’s banking services include a MasterCard that is topped up from your bank account. When you make a purchase in another country, the card exchanges your money into the local currency, ensuring that you aren’t hit with fees. It also allows you to send money through social media and text, email, and WhatsApp, all without fees or commission. Admittedly there have been a few issues for Revolut recently especially around CEO conduct and compliance.

Starling - Best British Bank and Best Current Account 2019, Starling is another mobile-only personal and business banking service. You get instant notifications when you spend or get paid, you can see insights that reveal your spending habits, and there are no fees overseas.

Tandem - Tandem wants your money to work for you, not for them. That means things like notifying you when your account is approaching its overdraft or when you miss a payment, and not sneaking in fees when and where you least expect.

Tide - As well as letting you open a business account in minutes, Tide gives you a free MasterCard (and up to 35 more for your team) which lets you spend abroad with no extra transaction fees. To help with bookkeeping, transactions are automatically categorised, you can sync with your accounting software, and you can easily share with your accountant.

Dozens - Traditionally, banks have made money from individuals struggling financially with overdrafts and loans, or monetising through customers’ data by offering existing financial products from other banks on a digital platform. Not all ‘challenger banks’ are challenging this, but Dozens is. It only makes a return on its savings products, and even for its investment portfolios, it only charges a fee when the value of a customer’s investment is higher than what they initially put in. We've previously written an explainer on Dozens.

Clear.Bank - The first new clearing bank in the UK for over 250 years, Clear.Bank uses state-of-the-art technologies and innovative services transform clearing and agency services for regulated organisations.

Coconut - A direct competitor to Countingup, Coconut was built to serve the underserved self-employed. It boasts automated tax management and expense tools, giving customers visibility into how much tax they owe with a real-time estimate, while also categorising their expenses for tax and allowing them to stay on top of client payments with instant notifications. We've previously written about Coconut. 

Amaiz - Amaiz combines smart banking with clever tools for invoicing, bookkeeping, expenses and accounting to make back office tasks much less of a headache. It will primarily serve small sole traders and entrepreneurs, but is open to anyone who runs a business on their own in the UK. 

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• #finance
• #banking
• #money
• #savings
• #fintech
• #banks
• #challenger banks

Published on: 31st March 2019