How to choose a challenger bank: 3 tips to get started
No small business owner wants to spend all their time chasing their bank manager. The good news is, business banking tech has come a long way, and you can expect a lot more from the challengers.
The UK’s love affair with traditional banking is dwindling. Access to traditional banking finance is often cited as a barrier to business growth, and PR disasters like TSB’s recent crisis serve to compound the issue.In the meantime, new financial organisations are springing up to cater for this underserved market. Is it any wonder that many small businesses are turning to the challenger banks?Since the Prudential Regulation Authority (PRA) at the Bank of England was set up in 2013, it has authorised 37 new banks. Of these, 17 are overseas banks, 16 are UK challenger banks and 4 are ring-fenced banks. So, with this dramatic uptick in the competition, how do you decide who to bank with?Here’s where challengers have the edge, and what extras you should be looking out for
Understanding the way you do business
Small businesses are often turned down for accounts with traditional banks for reasons they can’t understand, or don’t think is fair.Fortunately, a lot of challenger banks are created with small business customers in mind. That means they understand the way you do business, and they have the agility to cater to your specific requirements.Some challenger banks, such as Starling Bank, will also offer online community forums to connect SME owners with their peers, and may provide helpful content and resources to help with specific small business banking challenges.Look for a challenger bank with blogs offering expert advice these are the services that have been designed with your business in mind.
Getting tech savvy
According to theTrustly State of Online Banking 2017 report, 91% of people in the UK do online banking and 88% say it is easy to use online banking in general. Furthermore, 74% believe online banking is the safest method for transferring money.You need to make sure your business bank is future-proofed is it keeping up with payment technology, to ensure that your business? cash-flow doesnt come to a grinding halt?Financial technology ought to be there to help to help make the process of business banking quicker, smoother and more transparent.For example, some mobile-only banks, such as Starling, categorise all transactions in the app; whether its utilities, travel or entertainment, you can see exactly where your business is spending most. In addition, they can help business owners manage cash flow with real time notifications. Choosing a tech savvy bank should also speed up other business processes too there should be no reason to wait three weeks to establish your business account, or treks into a branch to meet the bank manager. Digital banking options are now available to make this quick, flexible, and more automated.