Editor in Chief (interim) AccountingWEB
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Where have all the digital bankers gone?

Help AccountingWEB map the leading contenders in online business banking by taking part in our annual software survey

14th Oct 2020
Editor in Chief (interim) AccountingWEB
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Rate your banking app in AccountingWEB's software survey
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Rate your banking app in AccountingWEB's software survey

In recent months, AccountingWEB has watched the competition between digital challenger banks intensify for a slice of the small business banking pie.

Even with all the incentives and innovation grants to encourage new players into the business banking market and the market disruptions we have seen this year, the big high street names are still estimated to control 85% of the market.

Part of that dominance was reinforced when some of the challengers were initially left off the lists of lenders approved by the British Business Bank for coronavirus loans.

That situation has changed since the coronavirus business interruption loans were first introduced, but old habits are difficult to break in business banking. The more popular, but equally contentious Bounce Back Loan Scheme (BBLS) subsequently drove many businesses back into the arms of their incumbent banks, who were charged with handing out BBLS to their customers.

The pendulum shifts back?

FreeAgent’s chief commercial officer Kevin McCallum has a ringside seat on this contest, as the cloud accounting software developer is now part of the NatWest Group. “The crisis shifted pendulum back to the more traditional banks,” McCallum told AccountingWEB. “In times of uncertainty, people are more comfortable that their money is safe in the bank.”

According to McCallum, NatWest and the other big banks were a bit like HMRC and put huge efforts into adjusting their services to the rapid changes imposed by the government’s response to the virus.

But what is remarkable from latest AccountingWEB software survey returns is the poor turnout so far from users of apps from the High Street banks. While businesses may be willing to approach them for Bounce Back Loans, are they really completely disconnected from the banks’ digital offerings?

The practice vote

Accountants in practice have also been outnumbered by business respondents in the ratings posted so far. Some of their votes have gone to the bigger digital banking players such as Tide and Starling, but the strongest contingent so far has come from Cashplus, with last year’s banking app award winner Countingup in pursuit.

The world of banking and fintech is incredibly fluid at the moment, with anecdotal evidence suggesting that the likes of Starling and Tide are thriving as businesses have gone digital during the Covid-19 crisis.

While AccountingWEB has been assessing the contenders based on publicly available sources, our helpful population of business accountants and practitioners can help us compile a more nuanced picture of UK digital banking adoption rates.

If you’d like to pat your digital bank on the back, or give a motivational kick to your banking provider, please take a few minutes to let us know what you think in our 2020 Accounting Excellence Software survey.

Have your say in the 2020 survey!

Replies (2)

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Richard Sergeant
By Richard Sergeant
15th Oct 2020 10:09

John, is this because some people see a difference between an app that looks and works a bit like a bank, and a bank that also has an app?

The former is where a digital product, service and application are one and the same-while the latter is a bank, that happens to have an app.

Would we expect votes for Lloyds business banking app in this category - for example?

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By Charlie Carne
15th Oct 2020 18:32

The biggest reason for using the app-based banks IMO, is the speed of opening a new account. I have a client who has had a company bank account with HSBC for over 10 years and wanted another account for a recently incorporated second company (which runs alongside the first, and still profitable, company). HSBC wanted to wait weeks just to have an appointment for a customer (the sole director/shareholder of that company) that they already knew well! Starling carried out due diligence within the app on a customer that they did not previously know and completed the account opening in about 48 hours from first contact.

Incidentally, I had a meeting at the tail end of last year with a client at Barclays. Most of the staff were wandering freely around the modernised branch in funky Barclays branded T-shirts, looking like the staff of apps that you see at accounting conferences. Not one of them could even confirm where the manager that we were due to meet was. It turned out that he'd entered the appointment in his online diary but managers' diaries didn't sync with the overall Barclays system so, when he went off ill, no one knew that this appointment existed and thus they could not offer an alternative manager to see us. Barclays had gone to the effort of looking like a 21st century bank (casually dressed staff, not kept locked up behind windows, cool branding, etc.), but had customer relationship management from the 19th century......wait, strike that; in the 19th century CRM was much better, despite being fully manual :)

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