Choosing the right bank for your business is an essential step. Your selection could either streamline your financial operations or hamper them. In the UK market, two popular options are Starling Bank, a modern, mobile-focused challenger bank, and HSBC, one of the world’s largest banking and financial services institutions. This article compares Starling vs HSBC on features, pricing, pros, cons, and unique attributes to help you make a more informed choice for your business.
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Starling Bank vs HSBC
| Feature | Starling Bank | HSBC |
|---|---|---|
| Type of Bank | Digital | Traditional |
| Mobile App | Yes | Yes |
| Online Banking | Yes | Yes |
| Business Account | Yes | Yes |
| Free Banking Period | No | Yes, up to 18 months |
| Branch Access | No | Yes |
| Business Loans | Yes | Yes |
| Business Credit Card | Yes | Yes |
| Overdraft Facility | Yes | Yes |
| Direct Debits | Yes | Yes |
| Instant Notifications | Yes | Limited |
| International Payments | Yes | Yes |
| FX Fee | Low | High |
| 24/7 Customer Support | Yes | Limited |
| Cash Deposit | Limited (Post Office) | Yes |
| Cheque Scanning via App | Yes | No |
| Multiple Currencies | Yes | Yes |
| Automated Expense Management | Yes | No |
| API Access | Yes | No |
| Business Marketplace | Yes | No |
| Accountant Access | Yes | Yes |
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Starling Bank
Starling Bank, founded in 2014, is a fully digital bank that has quickly become a popular choice among UK businesses seeking simplicity and convenience.
Pros and cons
Pros
- Accessibility: As a digital bank, Starling Bank is accessible 24/7 from anywhere in the world.
- User-Friendly: Starling offers a robust mobile app with real-time notifications and easy-to-use features.
- No Monthly Fees: Unlike many traditional banks, Starling Bank does not charge monthly maintenance fees for their business accounts.
- Automated Expense Management: Starling allows businesses to automatically categorise and track expenses.
- API Access: This allows businesses to integrate banking data into their existing systems.
Cons
- No Physical Branches: As an entirely digital bank, there are no physical branches for face-to-face support.
- Limited Cash Handling: While cash deposits can be made at the Post Office, these are subject to a fee.
Table of fees and charges
| Type of transaction | Fee |
|---|---|
| Business Account | Free |
| Electronic Payments (in and out) | Free |
| ATM Withdrawals | Free |
| Cash Deposits at Post Office | 0.3% of deposit amount |
| International Payments | Varies |
| Replacement Cards | Free |
Unique and standout features
- In-app Cheque Deposits: Starling Bank allows users to deposit cheques by scanning them directly in the app.
- Integrated Business Marketplace: The app includes a business marketplace where users can access third-party services such as accounting software, insurance, and more.
- Real-time Notifications: Users receive real-time notifications for all transactions, providing up-to-date insight into their financial status.
- Goals and Spaces Feature: This feature allows businesses to put money aside in designated ‘spaces’ for specific business expenses or goals.
HSBC
HSBC is a multinational bank founded in 1865, known for its extensive global reach and broad suite of services, including business banking.
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Pros and cons
Pros
- Global Presence: HSBC’s vast network makes it an excellent choice for businesses operating internationally.
- Free Initial Banking Period: HSBC offers up to 18 months of free business banking for new customers.
- Branch Access: Unlike digital-only banks, HSBC has numerous branches for customers preferring face-to-face interactions.
- Wide Range of Services: HSBC offers a comprehensive suite of financial services, including insurance, loans, and investment options.
Cons
- Charges Apply After Initial Free Period: After the free banking period, fees apply to many transactions and services.
- Limited Digital Features: While HSBC does offer online and mobile banking, it does not offer the range of digital features that many challenger banks do.
Table of fees and charges
| Type of transaction | Fee |
|---|---|
| Business Account Monthly Fee | Free for first 18 months, £6.50 per month thereafter |
| Electronic Payments (in) | Free |
| Electronic Payments (out) | £0.20 |
| ATM Withdrawals | Free |
| Cash Deposits | £0.75 per £100 deposited after initial £3,000 cash limit |
| International Payments | £4-£30 depending on method |
Unique and standout features
- International Services: With its global footprint, HSBC can support businesses with their international needs, offering services like foreign exchange and international trade support.
- Dedicated Relationship Manager: Larger businesses have access to a dedicated Relationship Manager who can provide tailored advice and support.
- Physical Branches: For businesses that prefer dealing with banking matters in-person, HSBC’s physical branches can be an advantage.
Conclusion – Starling Bank vs HSBC
Starling Bank and HSBC both offer strong business banking options but cater to different needs.
Starling’s strength lies in its user-friendly digital features and transparent, low-cost fee structure. It is ideally suited for small to medium businesses comfortable operating in a digital environment.
On the other hand, HSBC offers a more traditional banking experience, complete with physical branches and an extensive array of financial services. Its global presence also makes it an attractive option for businesses with international dealings.
Ultimately, the choice between Starling Bank vs HSBC will depend on your business’s specific needs, priorities, and comfort level with digital banking.
FAQ
Yes, you can deposit cash into your Starling account at any UK Post Office branch, although a fee of 0.3% of the deposit amount applies.
No, unlike Starling, HSBC offers customer service within specific hours, which vary depending on the service and the channel (phone, in-branch, etc.)
Yes, Starling Bank does offer business loans to eligible businesses.
Yes, HSBC offers up to 18 months of free banking for new businesses.
While Starling is a digital bank that operates primarily through an app, it is known for its user-friendly design. However, comfort with using a smartphone is important.
No, HSBC does not currently offer instant notifications for all transactions. It does, however, provide online and mobile banking, where you can check transactions.