The Definitive Guide to the Best Business Banks in the UK: Explore Open Banking and Make an Informed Decision
Choosing the right business bank can make all the difference to the success of your business. With so many different banks offering different products, services and customer experiences, it can be hard to decide which one is the best fit for you. That’s why we’ve put together this guide to the best business banks in the UK. In it we take a close look at Starling, Monzo, Metro Bank, Co-op Natwest, HSBC and Barclays.
We’ll consider their customer experience, green credentials, fees, and more, so you can make an informed decision about which is the best bank for your business. We’ll also explore open banking and discuss whether it needs to be on your radar. So, if you’re ready to find your perfect business bank, let’s get started!
In today’s world, where your clients are more mindful than ever about who they do business with, it is important to make sure that you are making the right decisions for your company. By considering a bank’s green credentials, you can ensure that you are making an informed decision when it comes to selecting a business account.
The bank.green website has a simple tool that you can use to check how green your bank is. According to bank.green Starling, Monzo and Co-op all have strong green credentials and are not funding the fossil fuel industry.
Barclays, Natwest and HSBC on the other hand, all fall within the category of the ‘60 biggest funders of fossil fuels in the world.’ To find out more about ethical banking and why it is important for your agency, read our blog; ‘Banking with a conscience: Why ethical banking matters for your business’.
Ranking in terms of Green credentials:
- Monzo, Co-op
- HSBC, Natwest, Barclays
Ability to set up delegate Users
Not all business bank accounts will allow you to add delegate users. For business owners, this can cause headaches, especially when the only person who can make or approve bank payments is the business owner. You have a million and one important things to do and logging into your online banking app to pay the wages shouldn’t be one of them.
Surprisingly for a bank that gets so much right, this is something that Starling bank gets wrong. It’s just not possible to set up delegates on a starling business account who are not company directors.
All of the other banks reviewed here allow you to add a delegate user however you may have to wait some time and jump through lots of hoops to get there:
Ranking in terms of ability to add delegate users
- Metro, Barclays, HSBC, Natwest, Co-op
Whilst it is possible to set up delegates on Monzo however each delegate must first open a personal Monzo bank account. There’s a risk that their applications to do this will be rejected, especially if they are honest that the account will not be their main current account!
Xero bank feed
All of the main UK business banks now have a direct bank feed into Xero. A direct feed from your business bank account is essential to enable your financial records up to date and accurate. All of the banks listed here have direct bank feeds into Xero.
1st equal: Starling, HSBC, Barclays, Natwest, Metro, Monzo, Co-op
Traditionally all business banks charged fees to their users but with the emergence of newer banks things have started to change.
Ranking by Fees
- Starling (free)
- Monzo (free for its Lite offering)
- Natwest (free for first 18 months)
You don’t want to feel like dealing with your bank is like banging your head against a brick wall. You want it to work, and when it doesn’t work, you want it to be easy to get the support you need from your bank manager to put it right.
So how do other customers feel about their experience with the top UK business banks?
Overall starling bank came out top with 83% of their customers recommending them.
Ranking by customer recommendations
- Starling (83%)
- Monzo (79%)
- Metro (64%)
- Natwest (56%)
- Barclays (55%)
- HSBC (43%)
- Co-op (40%)
Open banking is an innovative system that allows businesses to securely share financial data with third-party services. One of the benefits of this is that you can connect your bank with third-party apps, giving you access to a range of services to help you run your business.
With the exception of Metro bank and Co-op, all of the banks we’ve reviewed are part of open banking.
This may not be a problem for you, but if you want to use tools like Crezco, you won’t be able to if you bank with Metro Bank or Co-op.
Ranking by Open banking functionality:
1st equal: Starling, Monzo, Barclays, Natwest, HSBC
2nd: Metro, Co-op
Sometimes you might run short of cash, for example when a customer pays later than you expected or when you’re hit with unexpected costs. When this happens, an overdraft facility can provide your business with a financial safety net to help you manage it’s cash flow.
With the exception of Monzo, all of the banks we’ve looked at offer overdraft facilities on their business bank accounts.
1st equal: Starling, Metro, Barclays, HSBC, Natwest, Co-op
Overall Business bank recommendation
Overall, your choice of business bank will depend on which factors are most important to you. Starling ranks highly across all categories, but if delegate access is essential, you may need to look at the traditional banks. Monzo is a great option if you don’t need an overdraft, and Metro Bank is ideal if you don’t mind foregoing open banking.
Here to help
Take the next step towards financial success for your business and find the right bank to meet your unique needs!