Business Banking Apps: The Complete Guide

Chapter 1

Choosing a business bank account

A business bank account is, quite simply, the heart of your business. It’s where you store your finances, and track what’s coming in and coming out. The goal of every business is to bring in more money in sales or services than you spend on business costs. Your business bank account is where all those essential metrics come together.

So it’s important to get exactly the right business bank account for you. That’s not easy, because there’s more choice than ever, with a generation of ‘challenger’ banks taking on the high street behemoths with technology savvy, customer-focused solutions. They are all shooting for a slice of a huge and growing pie – UK SMEs register a combined turnover of £1.9tn

As an SME you know your worth, and rightly demand more today from business bank accounts than money storage and access alone. Smart, useful financial management apps are part of that requirement. But there’s more to consider so, to start with, here are some bank account basics. After that, we’ll take a closer look at what banking apps can do for your business.

Do you need a business bank account?

If you’re a limited company, you need a separate account for your business. If you’re a sole trader, you don’t, though it’s a good idea for several reasons.

How much will it cost?

Business bank accounts charge a range of fees. Look beyond introductory offers and examine monthly fees (if any) alongside other costs, like cash or cheque transaction fees. Some accounts give better deals for online transactions, for example, or for making and receiving payments abroad, such as a multi-currency account. Others are cheaper for very basic business banking.

The most cost-effective option for you will depend on your own circumstances.

What else to look out for?

After that, look at what else you think you need from a business bank account. Would you like to be able to talk to an adviser in person? If so, an account from a traditional high street bank might be best for you. If you’re happy doing your banking solely online, a new digital-only bank might suit your needs perfectly well.

Business banking apps are now key

There’s no doubt that the business banking app that comes with your account is now a key consideration. The app is no longer just a means of checking your account. The best are powerful tools that help you administer your business more efficiently and intelligently. All are different, but a good business banking app might…

Chapter 2

What you need to know about business banking apps

Business banking apps tend to offer the same basic range of features, and compete for your business on more advanced functionality. Many sync with services from third party providers, letting you build the stack of financial and productivity services most useful to you.

The business banking app market

Ten years ago there were high street banks and, for most small businesses, that was it. No longer. Regulation, technology and reduced faith in big banks after the financial crash of 2008 have created a far livelier business banking market. Nevertheless, most SMEs continue to put their faith in high street business bank accounts, and the top five banks account for around 75% of the market. But challengers are nibbling away at this market share.  

Challenger banks

Challenger banks and fintechs (financial technology companies) have revolutionised the banking market with a digital-first mentality and the smart use of technology. Many are online only, giving you everything you need to run your financial affairs through a mobile and (sometimes) browser-based app. They use technology to offer innovative features and better customer experiences, like tools to track spending and money pots that make it easy to put cash aside for different purposes.

High street banks

The fintech revolution caught the high street banks by surprise. They are rushing to catch up, but legacy technology means their digital offerings are often not as smooth or sophisticated as those offered by new competitors. However, they retain large (if shrinking) networks of bank branches, ATMs, and telephone banking functions. If you think person-to-person contact is important, they might still be the best choice for you, and a 2018 study indeed found that 43% of SMEs had used their bank branch in the preceding three months. Branches are particularly useful if you still take old-fashioned cash…

Your business banking app – the star in your financial solar system

Increasingly, SME leaders are using a suite of digital services to help them run their businesses, including business banking apps, accounting solutions, expense management tools, foreign exchange services and many more. By mixing and matching solutions, SMEs create a network of financial tools that best suits their needs.

But that creates a need for integration. All these solutions work best when they work together. An integrated network of tools can save SMEs a huge amount of time, money and hassle.

APIs are key

APIs are the technology that lets banks securely share customer information with third party providers (TPPs). When they have that data, TPPs can tailor services to your needs, and automate tasks – reconciliation, for one – that would otherwise be time consuming, tedious and prone to error. And that matters for small businesses: big companies have legions of staff, but if you’re running your own show, you probably have better things to do than paperwork.

An integration history lesson

Before APIs, integration was achieved through a technique called screen scraping, which effectively meant giving your financial service login details to a third party, who would then go in and copy financial data for use elsewhere. It was slow and woefully insecure, and the practice has recently been outlawed in the UK. APIs achieve the same result more quickly, efficiently and securely, ensuring that third party providers never see log-ins and only receive the specific information they have permission to see.

Open Banking

Connected networks of useful financial services have even become a core aim of industry regulators. Open Banking is the UK version of a piece of European legislation known as the second Payment Services Directive, or PSD2, which makes big banks open up customer data to third parties via APIs. By doing so, it opens the way for a new generation of financial products that use this data to create more personalised, intelligent and responsive propositions.

Integration as standard

Open Banking is setting the direction of travel; and the future will only be one of increased integration. Already services are emerging that unify services in a single app. Dozens, for example, combines a current account with an investment manager. Coconut brings banking, accounting and tax estimation for sole traders together in the same service.

How to use financial reports to make better business decisions

Chapter 3

Business banking app functionality

So what can you get from modern business banking apps? Expect a raft of standard features with each app offering a selection of more specialised tools on top. 

Standard features should include the functionality to:

Challenger bank features

Pretty much the USP of challenger banks is to offer a wealth of features through mobile banking apps, and the right account for you will depend on your circumstances. As an example, here are three digital-only business account providers and what their apps offer.

Accounting Software
Multiple Accounts (money pots)
Starlingyes (via third party)yesyesyesyes


Standout feature: its Business Marketplace, a suite of potentially useful integrations for your business account, covering lending, accounting and more.


Standout feature: excellent in-app invoicing.


Standout feature: tax estimating and accounting tools for sole traders.

High street bank features

High street business banking apps tend to be more basic than challenger equivalents, but the arrival of Mettle shows that incumbents are trying to close the gap.


Mettle, from RBS, combines a business current account with simple invoicing, payment chasing and bookkeeping features. It features basic in-app invoicing, along with spending forecasts, payment reminders and expense reporting.

Expect other high-street banks to offer increasingly competitive services, too.

What business banking apps mean for you

Three use case scenarios…

Annual accounts

For a small business, preparing annual accounts is a seemingly endless chore. In particular, categorising expenses and calculating corporation tax and VAT is time consuming and brain numbing. A business banking app can help. Many automatically categorise payments, making expense calculations easy. Some (see Coconut above) help directly with tax. Many banking apps sync seamlessly with accounting software, cutting out hours of boring and error-prone data entry at year end.

Management reporting

Whether profit and loss, balance sheet, cashflow or expenses, accurate financial reporting leads to better business decisions. Many business banking apps help you to gather and categorise the data your business needs to plan for the future, letting you produce elegant, insightful reports. By syncing with CRM (customer relationship management – your list of customers and prospects) or expense management software, you can also perform more detailed dives into valuable business data.

Easy invoicing

If you want to get paid in a timely manner, strike while the iron is hot. In-app invoicing lets you prepare and send invoices on the go, perhaps on the way back from a job? It also lets you track unpaid invoices, so there’s no chance of any falling through the cracks. Send reminders for overdue payments and get a notification when an invoice has been settled. Sync with accounting software and automate the entire invoicing process.

Chapter 4

The ideal SME financial management stack

When you have the right business banking app you can add services to create the ideal financial management stack for your business.  

Accounting, e.g. Xero

Many business banking apps sync with Xero via an automatic bank feed. Xero is a powerful small business accounting solution, and the benefits of this integration are immense. Transactions are automatically uploaded into your accounting software, making everything from reconciliation to tax calculations quicker, easier and less error-prone.

Expense management, e.g. Soldo

Soldo is a sophisticated expense management solution that uses banking integration to let you quickly and easily transfer funds onto secure prepaid debit cards. Users get controlled access to company money, but not to the company bank account or credit card. Soldo in turn syncs with Xero, feeding categorised expenses data directly into your accounting ledger.  

Cash flow visualisation, e.g. Futrli

Bank data flows into Xero, and is analysed by Futrli, a cash flow tool that runs AI over your bills, invoices, expenses and more to provide instant insight into your cash flow status. It runs the rule over cash flow history to find trends and patterns, making for more accurate forecasting. Futrli makes cash flow predictable, giving you an up-to-the-minute understanding of your true financial position.

Payment processing, e.g. Stripe

Stripe helps you get paid faster, by letting your customers pay via credit card, debit card or ACH bank transfer. Stripe processes payments for you, sending the cash to your digital account via an automatic bank feed. Xero syncs instantly with the Stripe feed so you always have an accurate snapshot of your accounts receivables and cash flow.

Performance management, e.g. Fathom

Your accounting software draws down transaction data, and Fathom helps you track the metrics that matter, giving you deeper insights that lead to better business decisions. Fathom automatically tracks profit, cash flow, growth and other key performance indicators, facilitating the creation of engaging, intelligent reports.

The benefits of your integrated business stack

Nearly two thirds of businesses experience cash flow issues on a regular basis. Nearly half of SME leaders blame a lack of time as a key source of work pressure. Three quarters of business leaders struggle to find time for anything but the day to day survival of their businesses.

The integrated business stack works together to make everything from cash flow forecasting to expense management part of your wider business strategy. It accumulates data, categorises it on your behalf, and produces business intelligence at the click of a mouse. It automates this process, creating insight without eating into your precious time, giving small businesses access to the sort of information that was once the preserve of much larger organisations.  Perhaps more importantly, most of us start our business because we are experts in what we do, rather than in managing our money. These apps allow you, for the first time, to become a financial whiz without being an accountant first.

Chapter 5

What’s around the corner?

In the new interconnected world of business banking apps, the stack serves your business. Your bank account becomes the engine driving an ecosystem of connected financial services.

That’s as it should be. Bank lending to SMEs has fallen by 3% since 2015, despite the rapid growth of the sector. Surveys also suggest that SMEs are dissatisfied with uncompetitive fees, outdated processes and poor service. 

SME banking wasn’t working, and the landscape is ripe for further change. According to one report, “the small business segment…is looking to eliminate manual processes, access working capital, and work more efficiently across borders.”

For that reason the future is likely to see more integration, and more players coming on board to address the particular issues SMEs face. Here’s what it might mean over the next couple of years.


Small business lending is in crisis, with the value of loans issued to SMEs through the government’s small business lending scheme down 78% since 2009.

“Banks have implemented stricter lending requirements, deterring many SMEs from applying for funding and leading to a year-on-year reduction in the number of approved loans,” says EY’s Future of SME Banking report.

Open Banking is already helping to improve this situation, with fintechs like Iwoca building API integrations with Barclays, HSBC and Lloyds to facilitate quick and pain-free lending to their small business customers.

A joint initiative by challengers ClearBank and Tide could push SME lending to the next level. The ClearBank Tide Business Banking product aims to improve SME cashflow by connecting small businesses with lenders and “integrating with debtor insurance providers,” creating lending with less risk.

Starling Bank, meanwhile, recently outlined plans to create “a suite of lending products using automated and secure processes that deliver loans in minutes to boost SME growth and productivity,” accessed via its app Marketplace. 

Other near term developments

Lending is the most pressing issue facing SMEs, but both challenger and incumbent banks are promising to launch new digital products and services in the near future.

There are other possibilities, from “robo” financial advisors making decisions on behalf of your business, to more community banks serving niche segments. But one thing seems certain. Digital banking apps will increasingly act as gateways to a galaxy of connected small business services, giving SMEs access to tools and intelligence that would have been unthinkable just a decade ago.