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What are challenger banks? And how will they help your business?

We keep hearing about challenger banks disrupting the market... does what does that actually mean?

UK Banking is changing with the TIDE

The UK banking market has desperately needing a change... or disruption, as the techies call it.

Why? High street banks closed almost 3,000 branches across the UK between 2015 and 2018.

The high street is closing, and the banks have not stepped up when it comes to providing a more flexible service for SMEs.

Our clients have reported slow finance functions, lack of relationships, and the tech is behind the times. Business needs have changed... cash and cheques are dying out, and currency exchanges need to be cheaper and faster.

How does it work?

Most cases, all you need to do is download the bank’s app, order your bank card (usually send within 24-48 hours, and you;re all set up.

I recently opened a personal account with Monzo. Took me two minutes. So far, we are loving it.

What else is out there?

There are a fair few popping up for UK SMEs... here is our quickfire overview of the top banks out there. We;ve listed the pros, and the cons... and the costs!

The Pros:

  • Real time payments, at the click of an app

  • Cost effective banking

  • Budgeting and expense reporting

  • Links with your accounting software (like Xero)

  • App based

  • Schedule payments

  • Instant overview of transactions

  • Freeze and unfreeze your card when you lose it.

The Cons:

  • No branches for cash deposits. in some cases you can use a post office to deposit cash transactions.

  • No cheques issues or accepted.

Extra Features:

Create and pay invoices in the app, access your account on any laptop or desktop and set up direct debits.


  • No monthly or annual fees

  • No fees for card payments

  • £20p for transfers between accounts

  • Cash Deposit £1 Post Office, or 3% using PayPoint

  • ATM withdrawals £1

Extra Features:

Starling’s “Marketplace” offers competitive pensions, mortgages and insurance from other growing fintech companies.

Create saving 'goals'.


  • No monthly fees

  • £3 to deposit cash into your account via a UK post Office

  • 50p to withdraw cash over the counter at UK Post Office

  • 15% EAR, which accrues on a daily basis if you go over your overdraft

At the beginning of 2019, UK-based Revolut announced that it had exceeded over 3 million users.

Extra features:

  • Hold, receive and exchange 29 currencies without any ridiculous bank charges.

  • Payment approval lets your team raise payments that need to be approved.


Freelancers: £6.99 For personal freelance accounts with up to £100K incoming funds per month

Business (Corporate cards) under your formally registered business name:

  • <100K transactions per month from £25pcm

  • No charges on transactions apart from ATMS. set at a 2% fee on all withdrawals.

  • No direct debits, but then you could use Go Cardless.

At the end of the day, you need to choose which is best for you, and your business. Make sure you check the terms of each bank thoroughly before signing up.

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