Digital banks are disrupting the sector, but they have limitations. The amount of tech that is being launched every day in the accountancy industry is crazy, and Accountex London gave us a chance to look at new software providers, as well as look at updates to existing ones. 

The emergence of digital banks such as Starling and Monzo has been exciting over the past few years, so much so that high street banks have been launching their own digital-only accounts. Natwest has Mettle and HSBC have Kinetic. Whilst these banks have definitely disrupted the banking sector, particularly when it comes to customer experience and service compared to their high street competitors, they have also come with certain limitations, in only being able to offer standard current accounts, either personal or business and only for UK companies trading exclusively within the UK. 

Starling broke this trend a couple of years ago by offering finance and lending solutions, but these banks still fell short in their offering for businesses with more complex banking requirements. For example, a letting agent needs a client account that holds client money that cannot be used for business use. This account is also audited and regulated to ensure client funds are not touched. 

A second example is a hospitality business that has a large portion of cash payments from customers, and that cash needs banking every week. 

For example one, no digital bank currently offers client accounts, so the letting agent is restricted to the high street banks. For example two, the digital banks charge for cash deposits as they have no high street presence, which is not viable for the hospitality business that is already struggling in the current climate. 

The great thing about digital banks is that they listen to their network. Client accounts are on the road map for at least three of the digital banks, whilst cash deposits to at least two of these banks are planned to have deposit charge rate changes depending on the industry the business operates in.