Advantages of Holding a Traditional "Mainstream" Bank Over Mobile Current Account Providers

Gregory402

Other than the fact that mainstream banks can offer loans, mortgages etc. what are the benefits of being with a traditional / mainstream bank like NatWest over being with a mobile-based one like Monzo or Sterling?

The mobile ones don't have branches but almost anything you'd need one for is included in their app. They are starting to slowly offer credit products. They operate like any other current account but without the hefty charges that traditional banks have.

Does anyone have anything that justifies favoring them over the new era of mobile current accounts? Do we still have an actual advantage over people who cannot get one for whatever reason?

JuicyJesus

If you ever need anything weird or particularly urgent, a mobile bank will likely be much less able to accommodate than a traditional branch-based bank (or even set-ups like First Direct, who aim to approximate branch-based service but over the phone).

Also worth noting that at the moment, none of the app-based banks are profitable, and Monzo's overdraft usage fees are among the most expensive (and indeed their fee structure is of a type that the FCA is explicitly banning). All very well to talk about how their fees are better but expect that to change once they've stopped trying to penetrate the market and instead realise they have to find a way of monetising their customer base to stay afloat.

Finally, this is more personal for me, but as someone who has to give bank statements and such to the Home Office to keep their partner in the country there is no goddamn way I'd trust Monzo or Starling's statements to be accepted.

Gregory402

JuicyJesus wrote: »

If you ever need anything weird or particularly urgent, a mobile bank will likely be much less able to accommodate than a traditional branch-based bank (or even set-ups like First Direct, who aim to approximate branch-based service but over the phone).

Also worth noting that at the moment, none of the app-based banks are profitable, and Monzo's overdraft usage fees are among the most expensive (and indeed their fee structure is of a type that the FCA is explicitly banning). All very well to talk about how their fees are better but expect that to change once they've stopped trying to penetrate the market and instead realise they have to find a way of monetising their customer base to stay afloat.

Finally, this is more personal for me, but as someone who has to give bank statements and such to the Home Office to keep their partner in the country there is no goddamn way I'd trust Monzo or Starling's statements to be accepted.

I can see where you're coming from. Like that personal touch which can't be replicated in the current climate of mobile current accounts.

It is worth nothing though that their customer base is growing into the millions and it's very common now as someone who works in POS to see the bright colored cards of the likes of Monzo etc. I definitely agree that 50p per day for borrowing over £20 is very expensive and is not worth using at all unless it was for a real emergency and only for less than a few days. This makes me curious as to why they're so strict with credit approvals when their charges are so high equivalent to even below subprime standards.

Yellow_mango

I have a Starling account and love it. I have no desire to ever use a branch, or call anyone, and so the app based system suits me very well.

BUT the very occasional times I do use the branch, mean that I am unwilling to give that up entirely.

For example: I’ve just bought a house, and needed to transfer a large amount of money for the deposit at very short notice. Going into the branch, checking my ID and the reason for the transfer, and triple checking the account details against the solicitor’s instructions, and receiving a printed confirmation of the transfer are all things which would have been a lot harder without a branch, and made me a lot more nervous about the transaction. Even if it were possible to get this done by pre-authorising through their CS.

Similarly, I’d also be concerned that the statements you can self-generate and email to yourself would not be acceptable for mortgage purposes.

I also had an almost successful phishing attempt a few years ago. Going into branch was by far the most efficient way for me to resolve this and ensure there was no impact.

When it’s something really important, I guess I just prefer to deal with it face to face.

JuicyJesus

Gregory402 wrote: »

I can see where you're coming from. Like that personal touch which can't be replicated in the current climate of mobile current accounts.

It's not even so much the personal touch really. It's just that the range of services provided by app-based banks is very limited.

If all you need is wages in and card transactions/DDs out then Monzo and Starling etc will work fine, even admirably. It's when you need anything else that the whole edifice falls apart because they're so focused on the 99% of what customers need to do that the 1% falls by the wayside. It's just that that 1% also tends to be rather important and for large amounts of money.

This makes me curious as to why they're so strict with credit approvals when their charges are so high equivalent to even below subprime standards.

Monzo etc are in the penetration phase - they're trying to grow market share. Their laxness with credit, too, will change as soon as they discover what bad debt is.

To a great degree also, Monzo can afford to be pickier with its customers. High street banks cannot - they are bound to offer basic bank accounts that run as loss-makers, are bound to offer services like branches and cheque books that Monzo don't and won't and generally subject themselves to a great deal of oversight, which means extra cost. Ultimately there are reasons why the high street banks are the way they are and why none of them significantly undercut the others in terms of fees and terms despite it being in their competitive interest to do so - it's because running a high-street bank is actually rather expensive and that money needs to come from somewhere.

Yellow_mango

The depositing of cheques is another one. Starling only accept cheques by post. Which is fine for the odd £20 from a grandparent. Less fine when it’s 5 figures from the sale of a property for example.

quirkydeptless

Yellow_mango wrote: »

The depositing of cheques is another one. Starling only accept cheques by post. Which is fine for the odd £20 from a grandparent. Less fine when it’s 5 figures from the sale of a property for example.

I can pay in cheques electronically with my Lloyds bank app.


Very handy for that £1.00 cheque I got on a building society account closure without a branch visit!

I'm a bit surprised that Starling don't have this.

Yellow_mango

I can pay in cheques electronically with my Lloyds bank app.


Very handy for that £1.00 cheque I got on a building society account closure without a branch visit!

I'm a bit surprised that Starling don't have this.

Yes I can do it with my Barclays app too. Very handy for the small random grandparent gifts. I assume it will be introduced by Starling etc in time.

Still not sure how comfortable I would be using it (or whether it would be accepted) if the cheque was for a large amount of money.

Slappermum

To several posters above: Monzo sends out paper statements by mail on request... and they do so 1st class so you can actually have them within a day or two, unlike most traditional banks which can take up to a week.

System

I tried Monzo and wasn't really that impressed.

• Always needed to keep a 'real' debit/credit as a backup with it.
• Didn't always work at Pay at Pump or Post Office.
• Randomly declined low value transactions.

Not sure DevOps and my money are a good mix.

dcs34

Interest on account balance?