Origins and Background

Monzo was founded in 2015 by Tom Blomfield, Jonas Huckestein, Jason Bates, Paul Rippon, and Gary Dolman. Initially launched as a prepaid card service, it quickly transitioned into a fully licensed bank in 2017. Monzo has since become synonymous with the rise of mobile-first banking, boasting over 5 million users as of 2024.

Starling, on the other hand, was founded by Anne Boden in 2014. Unlike Monzo, Starling started with the ambition of being a full bank from the outset, receiving its banking licence in 2016. It has gained a strong reputation for its focus on business banking, in addition to personal accounts, and has been awarded several industry accolades for its service.

Account Features

Both Monzo and Starling offer a range of features designed to appeal to tech-savvy consumers:

• Monzo: Known for its vibrant coral-coloured debit card, Monzo provides a wide array of budgeting tools, spending insights, and savings pots. Monzo Plus and Monzo Premium offer additional features, including virtual cards, custom categories, and travel insurance. Monzo’s app is user-friendly, with a strong focus on helping users manage their finances effectively.
• Starling: Starling’s offerings include a sleek teal-coloured debit card and a comprehensive set of features for both personal and business banking. It excels in areas such as fee-free spending abroad, an extensive Marketplace offering third-party financial products, and robust business account features. Starling also offers a paid Business Toolkit, which provides invoicing, bookkeeping, and tax tools integrated within the app.

Fees and Charges

One of the critical aspects for users when choosing a bank is the fee structure:

• Monzo: Monzo’s standard current account is free, but it charges fees for certain services, such as cash deposits and withdrawals abroad beyond a certain limit. Monzo Plus (£5/month) and Monzo Premium (£15/month) offer enhanced features at a cost, with Premium including benefits like mobile phone insurance and higher interest rates on savings.
• Starling: Starling offers free personal and business accounts with no monthly fees. It has no fees for spending abroad or for cash withdrawals up to £300/day. Starling’s overdraft fees are competitive, and its Business Toolkit costs £7/month. Starling is known for its transparency in fees, often cited as a key strength.

User Experience and Customer Support

Both banks have invested heavily in ensuring a seamless user experience:

• Monzo: Monzo’s app is highly intuitive, making it easy for users to track spending, set budgets, and save money. It also offers 24/7 in-app support and a vibrant online community where users can engage with each other and the bank’s team.
• Starling: Starling’s app is equally user-friendly, with a clean interface and features that cater to both individual and business needs. It has a reputation for excellent customer service, with 24/7 support available via phone, email, and in-app chat. Starling’s detailed transaction categorisation and spending insights are particularly well-regarded.

Business Banking

Starling has a clear edge over Monzo in the business banking arena:

• Starling: Starling’s business accounts are highly praised for their comprehensive features, including the aforementioned Business Toolkit, integration with accounting software, and multi-user access for companies. It also offers Euro and USD accounts for businesses dealing in multiple currencies.
• Monzo: Monzo’s business accounts are relatively new and less feature-rich compared to Starling’s. While Monzo Business Pro (£5/month) offers invoicing and accounting integrations, it lacks some of the more advanced tools available with Starling’s offerings.

Security and Trust

Security is a critical concern for any bank:

• Monzo: Monzo uses cutting-edge security features, including real-time notifications, fingerprint or face recognition, and instant freeze/unfreeze options for its cards. It is regulated by the Financial Conduct Authority (FCA) and covered by the Financial Services Compensation Scheme (FSCS), which protects deposits up to £85,000.
• Starling: Starling also implements stringent security measures, including biometric login, instant transaction alerts, and the ability to lock the card instantly from the app. Like Monzo, Starling is regulated by the FCA and covered by the FSCS.

Final Thoughts

Both Monzo and Starling have carved out distinct niches in the digital banking space. Monzo appeals to those who prioritise a vibrant community, advanced budgeting tools, and a personal banking experience. Starling, on the other hand, is a strong contender for users who value comprehensive business banking features, transparency in fees, and a polished user experience.

Choosing between Monzo and Starling ultimately comes down to individual needs and preferences. Those who require robust business banking capabilities might lean towards Starling, while those who appreciate a more community-driven and feature-rich personal banking experience might prefer Monzo. Both banks, however, continue to innovate and challenge the status quo of traditional banking, making them worthy options for anyone looking to embrace digital finance.