Random question, but I'm moving to London in a few months, do you have any suggestions on banks or "challenger" banks I should go with?
(couldn't figure out how to DM you, not sure if it's possible on Hacker News)
https://www.which.co.uk/money/banking/bank-accounts/best-and...
Top of the list (as it often has been for decades) is First Direct. This is a challenger bank in its own way - it was launched in 1989 to pioneer telephone banking, a disruptive technology at the time! It now has phone and internet banking, but still has no physical branches.
Monzo and Starling, the proper challenger banks, are also rated very highly, taking the second and third spots.
Behind them are some somewhat unconventional banks:
Nationwide is a building society rather than a bank; functionally it's a bank, but it's owned by its customers, rather than by investors. Dates to the 19th century, has many branches, very boring really. My mum banks with them, and she doesn't complain.
Marks & Spencer is an upmarket department store (i swear by their lambswool socks!) which branched out into banking a while ago.
Metro Bank is a perfectly normal high street bank, with branches and so on, but it was founded in 2010. Apparently the last time a new bank was founded before that was 150 years earlier.
The Co-operative Bank is, as the name suggests, a co-operative. It's a bit like a building society, but not. I bank with them. Their website is terrible and their phone customer service has been slashed (although when you do get through to someone, they're great).
Only then do you get to Barclays, which is a classic high street bank - founded in the 17th century, branches in every town, full service, investment banking arm, rigs LIBOR, etc.
It's no longer a co-op and its relationship with the Co-Operative Group will end later this year.
[any fintech enthusiasts trying to think of a challenger bank niche the UK hasn't already got multiple heavily-marketed competing alternatives in might like to go down the ethics route...]
(Note: I don't use either)
First Direct and Marks and Spencer are brands of HSBC. First Direct is independent enough that you get a very different service from them compared to vanilla HSBC.
As others have said, Co-op is owned by private equity now. When they were a true co-op, you could forgive them the odd bit of sloppy service but there's no excuse now.
If I were coming to the UK for the first time, I'd see if a local bank in my country (usually it's HSBC or Santander) could offer to help me set up when a UK account with their local subsidiary. KYC, credit checks, etc can make opening an account difficult when you're new to the country.
Monzo doesn't ask for proof of address, while other banks will need something like a utility bill. As a newcomer to the UK, one is pretty much obliged to open a bank account with Monzo.
My understanding is that UK KYC basically don't specify exactly how to validate an individual's identity, only that the bank should do that (https://www.gov.uk/government/publications/identity-proofing...). It does suggest that a person's identity is "often someone’s name, date of birth and address", but it doesn't seem to mandate that.
I believe the requirement for banks to hold addresses is actually an AML requirement, and this only comes into effect for larger or riskier transactions.
In a sense, the requirement to have a "provable address" just to open a basic bank account becomes quite problematic when you consider there are people who don't have fixed addresses. Whats worse, you discover that most of the ways in which you can get a fixed address require you to have a bank account (e.g. renting a place to live). It's an entirely unnecessary chicken-and-egg scenario caused by the insistence of the older banks on collecting proof of address, which they didn't technically need to do.
And you're also correct in terms of AML - once a person crosses over a certain threshold or raises and risk alarms, they'll be required run further AML checks. Eg. if you were to signup to Monzo and then put 50 grand in there from a foreign account.
What Monzo has to do since they are new, is keep a squeaky clean record with the authorities. This is why Monzo usually blocks or even bans anyone that buys Cryptocurrency eg: https://www.reddit.com/r/monzo/comments/avdw8o/notice_regard...
Source: I work in Crypto
Other banks vary a lot in what paper they accept, but they always want some papers.
https://monzo.com/blog/technology
Also check out all the awesome tech meetups they host at their new office. There's a very strong and small open source 'cloud' tech community in London where everyone knows everyone. Try hard to meet some people and before you know it you'll have a new group of friends.
I was a huge Monzo fan, converted dozens of friends to it and was one of the first ones to get their beta current account (which I immediately started using as my main and only account despite it being in beta).
Nowadays however they seem to have trouble making profit, but instead of focusing on their existing customers they pour money into more marketing even though they can’t actually support all of them and now customer service response times are measured in days. They feel like a bullshit social media company with no real (aka profitable where people are happy to pay for it) product and are just trying to inflate their customer numbers no matter what.
Now I bank with Starling. They aren’t as “nice” as Monzo used to be but are definitely a lot better than the current Monzo both in terms of support and UI (Monzo redesigned their UI and it’s a shit-show now). They also offer business and Euro accounts if needed.
In addition they have business accounts which don’t have any of the costly features like interest, free cash deposits, etc so they’re profitable for Starling as they profit off the interest (especially relevant for business accounts as they might hold high balances keeping money aside for taxes and VAT) without giving out many costly features like cash deposits (the only overhead there is support and foreign ATM withdrawals).
Domestic ATM withdrawals are a cost for Starling as they have no network of their own; they're not even part of Link.
I'm not sure that the paltry interest they can gain from business deposits will be enough to make those accounts profitable (they just announced another £60m of funding this week).
I'm a relatively happy personal customer of Starling, so I'm not against them, but I do think it's a bit optimistic to say Starling's business accounts are profitable based on no evidence.
1) Sign-up quick and painless (You need a UK address though)
2) Card arrived in a few days
3) Activation just requires tapping it to your phone
Going to have to check out these meetups, sounds like fun.
I've moved the opposite way and have been quite happy with it.
TransferWise is only registered with the Prudential Regulation Authority as an e-money service authorised to provide payment services. You can search the register at https://register.fca.org.uk.
In reality, they appear to hold the funds with Barclays so if TransferWise failed, you'd get the funds back. It's only if Barclays themselves became insolvent that you'd be out of pocket since you wouldn't be covered by the FSCS.
Frankly even in the US I personally wouldn’t bother using credit cards. The management overhead of maintaining one (you have to pay it off on time, have 2 balances to look at, etc) is IMO not worth the money.
Unless I can automate this it’s still an extra step I can’t be bothered to do.
https://www.moneysupermarket.com/credit-cards/guide-to-credi...
They are an "Authorised Electronic Money Institution" like PayPal. If they go bankrupt, you will lose all your money.
https://register.fca.org.uk/ShPo_FirmDetailsPage?id=0010X000...
I'd strongly recommend you open a real banking account.
According to their site 100% of my funds should be covered since they are required to hold any client funds in a separate account which they cannot use for anything at all.
https://support.monese.com/hc/en-gb/articles/115002002229-Is...
Not sure what the implications are with that vs being a "real bank"
https://support.monese.com/hc/en-gb/articles/115002002229-Is...
"Unlike banks we do not re-invest customer funds and have to keep all customer money separate to our own company finances. We are required by Regulation to Safeguard all funds received from Monese customers. This guarantees that even in the unlikely event that Monese is no longer in business, all of our customers would receive 100% of their balance back"
The point of the FSCS is that it doesn't matter what happens to your bank. The government will pay you back up to £85k of what you had there.
So while it's not a given that if they go bankrupt you "will" lose all your money, just that you "may" lose all your money. :)
Insolvency events are covered by section 24 of Part 3 of the Electronic Money Regulations 2011.
"24. (1) Subject to paragraph (2), where there is an insolvency event—
(a) the claims of electronic money holders are to be paid from the asset pool in priority to all other creditors; and
(b) until all the claims of electronic money holders have been paid, no right of set-off or security right may be exercised in respect of the asset pool except to the extent that the right of set-off relates to fees and expenses in relation to operating an account held in accordance with regulation 21(2)(a) or (b) or 22(1)(b).
(2) The claims referred to in paragraph (1)(a) shall not be subject to the priority of expenses of an insolvency proceeding except in respect of the costs of distributing the asset pool."
So, these funds would be kept secure from other creditors and paid out as a priority.
https://www.legislation.gov.uk/uksi/2011/99/part/3/crosshead...
Id also open a second backup account with one of the high street banks Satandares fairly good on rates and Nationwide has a pretty good Cash ISA
Longer term I would go for ii if you want to get into Shares ISA's
I would not store my money with them.