It’s only been a few months since our last European challenger bank comparison. However, in FinTech terms, that’s about a years worth of traditional progress. Customer bases have increased dramatically, there have been more investments and a large number of additional features, a lot to catch up on!

Starling Bank

Their edge: B2B

Q3 main achievements:
“Best British Bank” award
“Best Current Account” award
New business account features

Starling has reached over 800,000 customers. This is an increase of around 30% in Q3 of this year. Furthermore, 60,000 of these users are for business accounts. Their strategy for targeting the B2B market has intensified. Their Banking-as-a-Service offering includes an API. This API allows banks and FinTechs to create financial services via their platform, using Starling’s banking license, but having the business clients’ branding. Their Business accounts also have an array of benefits. This is due to Starling’s 3rd party API marketplace being the most advanced out of its competitors. Business customers can easily integrate accounting data by using the marketplace, e.g. xero and flux. Amongst countless other services, this was the promise of open banking put in practice.

Starling customers’ average deposit is now £1,450 a month. This is relatively on par with legacy banks. This info suggests that customers have started to use Starling for their day-to-day banking, instead of as a prepaid card. Starling also has the most comprehensive cash deposit infrastructure. Something which challenger banks struggle with due to their lack of brick-and-mortar locations. This is yet another addition to their B2B edge, as business customers still handle cash. All the above reasons have contributed towards Starling being awarded both “Best British Bank” & “Best Current Account” by the British Bank Awards.

Monese

Their edge: European overseas workers

Q3 main achievements:
Partnership with Raisin
Google Pay integration across Europe

One challenger bank that seems to miss the spotlight is Monese. In Q3 they managed to increase their customer base from around 1m to 1.4m. Monese has tailored their challenger bank for European workers who work abroad. The hassle of opening an account in another country can sometimes be unbearable. Monese aims to fix this.

In September, Monese announced a partnership with Raisin. Raisin is a marketplace for savings and investments across Europe. This has meant that in Q3, Monese added some impressive savings account plans interest rates go up to 2.2%! Monese also released a business account, they seem to be shaping up their offering to become a fully-fledged Challenger bank.

Monzo

Their edge: simple, friendly & customer-centric

Q3 main achievements:
Gambling block
Premium, Business and teenage accounts
“Best Banking App” award
1 in every 20 adults in the UK now have a Monzo account

In Q3 Monzo increased their customer base by around 50%, currently they have over 3m customers. They launched a new Premium account called Monzo Plus. However, after being live for a few weeks and receiving feedback from their customers, they temporarily closed all premium accounts. Monzo decided that they could create a much better premium product. Therefore, they refunded all their premium card holders and have gone back to the drawing board. Although all the FinTechs mentioned are ultra customer-centric, Monzo seems to be the leader in this aspect. The “Monzo community” have chosen many decisions, and their feedback tends to always be a priority, Monzo Plus is just one example.

Monzo has also announced a further push for social impact initiatives. Blomfield explained that Monzo is looking for ways to embed social responsibility into the company permanently. Their vulnerable customers team have helped alot in this sector. A gambling block is one of the features which was launched because of this. The block prevents users from being able to spend money on gambling. Monzo have also stated they’re working on a junkfood block for those wanting to lead a healthier lifestyle.

Monzo also made some movements with their US expansion. They have ramped up their marketing campaign with community meetups and beta launches. Back in the UK, Monzo has been pushing users to switch their salary payments into their Monzo accounts. They’ve done this by creating a new ‘early payday’ feature. This allows users to receive their payslip at 4pm the day before. This is only accessible if you’re paid via Bacs. Furthermore, you can set up an automatic wage allocator. Meaning that once your salary is transfered, you could have it split into ‘pots’ for savings, bills, spending or more.

N26

Their edge: slick & professional

Q3 main achievements:
US & Switzerland Launch
$170M Series D Extension

N26 haven’t released any recent figures about their current customer base, which is curious as they usually post online when reaching a milestone. We can take an educated guess in saying that with their “10k sign-ups per day” that they have around 4.5m customers (approx. 1m increase in Q3), and are waiting to hit 5m customers to publish about it online.

Their U.S expansion is ahead of Monzo. N26 is fully open for business in the American market. Furthermore, they have launched in Switzerland. However their Swiss customers are only able to open accounts in Euros, not in Swiss francs (CHF). These expansions were made doable as N26 raised a further $170m in their Series D extension. This makes N26 the only challenger bank to raise funds in Q3. Wherease Monese and Monzo raised £2.5m and £113m respectively at the end of Q2.

Revolut

Their edge: a wide variety of features

Q3 main achievements:
Commission-free stock-trading
Donations feature
Plans to open an operations centre in Porto
Hiring of 3 ex-directors from Goldman Sachs, Credit Suisse & Visa

Revolut now has over 7m customers all throughout Europe. They are known as the challenger bank with the widest variety of features. From insurance, to cryptocurrency exposure, Revolut stands out as being the one-stop-shop for all things finance. In Q3 they added commission-free stock-trading to both premium and free accounts (with limits). Furthermore, they added a donations feature. This feature allows you to donate via purchase round-ups, recurring donations or one-off payments.

Revolut has both the highest number of customers and the largest percentage increase in customer base for Q3. They went from 4m+ customers to over 7m, that’s around a 75% increase! However, not everything has been running smoothly… Revolut started coming under fire over their regulatory compliance, management missteps and customer service issues. Upon this light, CEO Storonsky claimed he would make some changes so that the company can convert from an Uber-esque startup, to a mature company. He has in-turn made some high-profile hires to aid with managerial decisions. Additionally, he’s planned to open a new operations centre in Porto, with 400 customer support staff.