Sifted’s Amy Lewin discusses the fintechs disrupting business banking with Augmentum’s Tim Levene and Tide‘s Oliver Prill, amongst others.
“Digital bank startups aren’t just coming for personal current accounts. They’re after the business banking market too.
Why? Because there’s big money to be made — £14bn in the UK alone — and what’s on offer from traditional banks is universally acknowledged to be a right pain in the ass. It’s slow, it’s expensive, and it’s way behind on digitalisation.
Enter the startups. In the UK, the main contenders are Tide (focused solely on SMEs, small or medium-sized companies) and Starling (which has retail accounts as well). In France, the big player is Qonto. In Germany, there’s Penta and Hufsy(which is actually based in Denmark). In Norway, Aprila. For “micro-businesses” of 1-10 people, there’s Holvi in Finland, Coconut, Anna and CountingUp in the UK, and Shine in France.
Sifted looks into the numbers behind the leading players, asks who is winning the race to disrupt business banking and discovers how much the incumbent banks really have to fear.
So why do traditional banks offer such a terrible service to SME customers? “A lot of these small businesses are unprofitable for the big banks,” says Tim Levene, partner at London-based fintech VC Augmentum, and an investor in Tide. “They don’t have the infrastructure to serve them in a cost efficient way, so the service offering, from a digital point of view, left a lot to be desired.””