The latest Business Banking Service Quality survey organised by the Competition and Markets Authority shows a shift in the way UK businesses are choosing their banking partners. Challenger banks, set up to be digital first and to rival long established, national banks, are steadily gaining popularity, while what were deemed ‘high street banks’ are losing ground.

Who came out on top?

The three top-rated banks for overall service quality were Monzo, Mettle, and Starling Bank. 

Challenger banks appeal to businesses with their streamlined digital platforms, faster account openings, and easy-to-use online tools, which can make day-to-day banking more efficient.

However, it’s also notable that Handelsbanken, a bank that holds itself to providing banking where relationships matter, came fourth in the poll. This was despite it not featuring highly under the online and mobile banking services category.

This suggests that while businesses value digital convenience, demand for personalised support remains.

Is it time to switch?

Moving to a provider with better digital tools can save time on your routine transactions and the time spent dealing with your finances. Some banks may offer lower fees, more flexible lending, or a better interest rate, which can positively affect your bottom line.

A bank that understands the sector your business works in and provides proactive support can also be an asset that helps your business grow.

Switching banks is not without its considerations though. The process can take time and needs to be well managed to avoid causing issues for your customers and suppliers. It’s also worth noting that not all digital-first banks provide the full suite of services that a business might need.

Are there any other takeaways?

While the survey is about banking, the results provide some broader takeaways for businesses.

The growing popularity of the challenger banks suggests that convenience, speed and user-friendly digital tools are highly valued. The success of a relationship-driven provider also shows that personal contact, trust and tailored advice remain essential.

For businesses of all types, balancing these two priorities can be a key factor in building loyalty and satisfaction.

Our view…

Before you consider moving either your business or personal banking, be sure that you know what features or benefits you value. Look at whether systems are easy to use, the transition process and timeline, as well as potential ongoing charges. Even small improvements in these areas can have a meaningful impact.

We use a mix of challenger banks and the traditional banks, having added to our mix over time. The combination works well for us, but careful consideration is necessary.

In summary…

The business banking market is continuing to evolve. The changing landscape might provide you with a chance to improve your own banking arrangements, or it might be a prompt to review how your own business is doing.

If you’d like to know more about the findings of the survey, you can read the full results here.