Michelle Stevens, banking specialist at finder.com, a personal finance comparison site

Innovation in banking isn’t limited to personal accounts or consumer finance; business banking has seen its fair share of transformation in recent years, too.

Digital challenger banks and fintechs entered the sector around 5 years ago, taking on the high street banks. Analysis conducted by the FCA found that the market share for business accounts among the “big 4” banks dipped from 74% in 2019 to 67% in 2021, while the market share for digital challengers climbed from 1% to 10% over the same period.

This may be partly because the sophisticated digital banking features typically associated with this new wave of challengers are important to businesses. From advanced mobile app banking and invoicing services, to expenses management and integrations with external accounting software, business accounts have come a long way over the past decade. 

In a recent survey of business account holders by Finder, 75% cited online banking as the most important feature to them, closely followed by mobile app banking (73%), the level of customer service (72%), the cost of account transaction fees (71%) and the monthly account charge (70%). Our poll also uncovered that challenger business banking brands enjoy a higher customer satisfaction rating - an average of 88%, versus 76% for traditional banks.

But as high street banks continue to close branches and develop their digital offerings, there could be scope for them to curb the growth of the challengers. Finder’s research found that 60% of business account holders have their business account with the same provider as their personal current account, giving these banks a loyalty head-start. Some 72% of those polled had also never switched their business banking provider, showing that the majority of business account holders are loyal to the bank they initially set up their account with.

Business account holders who are tempted to switch providers - and 36% told Finder that they’re considering doing so over the next year - can use the Current Account Switch Service (CASS). As well as the pull of potentially better account features and tools, fees have also been a battleground recently, with some providers not charging any monthly account fees, or offering long introductory periods of fee-free banking to new account holders and switchers.

So business account holders who are looking to switch should check several aspects of their potential new account: whether the banking tools meet all the requirements of running their business; if there are any new features that would be of additional benefit; and what the account charges are, including transaction, monthly and overseas fees, as well as how long any offer of free banking lasts.

Only time will tell if business account holders decide to get into the switching habit, or if the “big 4” high street banks can stop the slide in their market share. But one certainty is that innovation in business banking is only set to continue.