The UK’s Starling Bank, launched in 2014 as a digital, mobile-only challenger bank, has opened up its business account to hundreds of thousands more of the country’s small and medium-sized enterprises (SMEs) by inviting companies with more than one person of significant control (PSCs) to sign up.
The move, which the bank says is made in response to high demand, represents a milestone in Starling’s bid to challenge the dominance of the UK’s Big Four lenders, which account for 85% of the market.
Starling’s new multi-PSC account comes 16 months after it launched its mobile business bank account for single-person businesses, which now has almost 60,000 customers. In April the bank won a £100 million (US$124 million) grant from the Capability and Innovation Fund (CIF), a body created to boost competition in SME banking.
Starling is using the grant to build a full suite of digital banking products, intelligent forecasting tools, and digitally-enabled relationship management functions as well as lending products.
PSCs typically own 25% or more shares of a business and/or 25%+ of the voting rights. This new account has been built for businesses where multiple PSCs who are also directors of the company need access to the account, such as husband and wife and civil partnership teams.
Starling’s business account has no monthly fees, no fees for making a payment to another UK bank account and no fees for withdrawing cash via ATMs. PSCs, who are also directors in the business, will be able to gain full access to the account and development is underway to make it suitable for more complex businesses which require greater control and individual access permissions.
Companies will be able to apply for an account in minutes and, once approved, instantly make payments to suppliers – including international payments – and receive real-time balance updates and spending insights all from their smartphones. They will also be able to make cash deposits and withdrawals at any of the 11,500 Post Office across the UK.
The account will give businesses access to the Starling Marketplace, allowing them to choose from a range of products and services that are integrated with Starling including accounting software integration with accounting services Xero and FreeAgent and insurance services through insurtech firm Zego.
“Opening up our business account to SMEs with more than one PSC will give hundreds of thousands more companies access to our features, meaning they can manage their finances conveniently on their smartphone without having to worry about where their nearest bank branch is and when it will be open,” said Anne Boden, founder and CEO of Starling Bank.
“With funding from the Capability and Innovation Fund, we are reshaping the SME banking market, using technology to help businesses thrive.
“We have a fantastic entrepreneurial spirit in the UK and Starling wants to give SME business owners the best possible banking services to make their life easier and allow them to focus on what counts.”
Also ready to challenge the UK’s Big Four is Nationwide Building Society, which has just struck separate deals with MasterCard and ClearBank, as it works towards the launch of its own business banking offering. In addition, Starling rival Revolut is expanding its own business account offering by rolling out two new fee-free accounts for small businesses looking to operate overseas.