AltFi Insights: Here’s which SME challenger bank is winning

By Oliver Smith on 25th March 2019

Challenger Banks

It's a close race between the UK's six largest digital and high street SME challenger banks.

AltFi Insights: Here’s which SME challenger bank is winning
Image source: AltFi

AltFi Insights are articles where we analyse, unpack or exclusively reveal something new happening in peer-to-peer finance, fintech or crypto.

With all the attention on consumer banking where digital challengers like Monzo, Starling and even high street challengers like Metro Bank, you might not have noticed what’s going on in the SME space.

A quiet battle raging as six larger challengers vie for market share in the lucrative SME banking space.

The UK has 5.7m SMEs which make up over 99% of all the businesses in the country and turn over £1.9trn a year. Of these, the overwhelming majority (5.5m) have a turnover of less than £2m and fewer than three employees.

But who is winning in this space?

According to EY the incumbent high street banks control over 75% of business bank accounts in this space, but their market share is being eroded by challengers.

An AltFi analysis today reveals that collectively the top six SME challengers control 10.2% of the market.

 

Of the six largest challengers, CYBG is the clear leader, with around 190,000 SME business accounts.

But the situation could change quickly, Tide CEO Oliver Prill told AltFi last week that his market share is currently growing at 0.1% every month. At that rate Tide will overtake TSB by the end of 2019.

Starling likewise has only recently come to market, and is working to remove the two big obstacles from its SME business accounts in the next few months, which could unlock its own huge growth.

And that’s not to consider the rise of so-called ‘flanker’ banks created by incumbents to head-off the growth of these challengers. Mettle, launched by RBS last year, has already seen promising growth.

AltFi Insights are articles where we analyse, unpack or exclusively reveal something new happening in peer-to-peer finance, fintech or crypto.

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Companies in this Article:

CYBG
Metro Bank
Monzo
RBS
Starling Bank
Tide