Starling Vs Monzo 2021 [Detailed Comparison]

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Digital banking is a type of banking that allows people to perform specific tasks that they would typically need to do in person over the internet. It also helps cut down on costs for banks, as there are fewer costs associated with processing electronic payments.

Starling Bank and Monzo Bank are two of these types of banks, and it aims to provide their customers with everything they need through their app. Let us discuss features of these banks individually:

About Starling

Starling is a digital banking alternative that puts you back in control of your money. Starling’s award-winning app helps you monitor your spending, stay on top of bills and save effortlessly, all within one secure personal account.

Starling has been awarded the highest scoring mobile bank for customer satisfaction, as well as Best UK Mobile Banking App two years in a row. Starling has also been voted Best Mobile-only Bank by the prestigious finance website Moneywise and received the highest independent rating of any mobile bank from review platform Trustpilot.

Starling was launched in June 2014, and it is known as “the app that isn’t a bank”. Starling’s chief executive officer is Anne Boden. Starling Bank has over 100,000 customers and manages £2 billion of deposits, which it claims is equivalent to a fifth of the savings held in UK current accounts.

Starling’s branding also aims to challenge many traditional banking norms such as pastel colors and checkbooks. Starling has been featured on platforms such as CNBC and Finovate. Starling Bank is considered part of the fintech community, alongside other UK banks like TransferWise, Monzo, and Atom Bank.

On April 1st, 2018 Starling announced that it would no longer be charging customers for using its cards to make contactless payments., later that day Starling announced that it would be introducing a £100 a year fee for Starling customers. Starling said the move was due to the “uncertainties created by Brexit”.

Since Starling launched in 2014, Starling has been developing its own technology stack using Scala and distributed ledger technologies such as Ethereum, BigchainDB, and Stellar which it claims helps Starling to comply with stringent industry standards and regulations.

Starling says it is the only digital bank in Europe that does not rely on partner banks to process its customers’ payments and Starling has never outsourced any of the technology running Starling Bank to third parties.

Starling’s technology stack also means Starling can make instant transfers between Starling accounts and Starling customers’ other UK bank accounts, something Starling calls “instant Starlings”. Starling’s security infrastructure is compliant with Level 1 PCI DSS requirements.

Starling Bank also claims that its products are more environmentally friendly than traditional banks as Starling does not print paper checkbooks or physical debit cards, there is no paper trail behind Starling’s transactions and Starling does not operate with cash.

Starling also claims that it is the only mobile bank in Europe that is building its own infrastructure from scratch, rather than relying on partner banks for access to core banking services. Starling has a dedicated team of 100 developers working on Starling’s technology stack.

Features of Starling

Starling offers free scheduled payments, free instant Starlings, wealth management tools, currency exchange rates with no markups, spending insights, balance notifications, and more.

Starling also claims that it is the only mobile bank in Europe that doesn’t rely on partner banks for access to core banking services. Starling Bank customers can set up direct debits, free Starling payments, set up standing orders to split spending automatically between Starling accounts and Starling customers’ other UK bank accounts.

Starling Bank offers a smart budgeting feature that makes suggestions on how to split Starling account funds over various categories such as groceries or petrol.

Starlings are transfers between Starling’s own accounts which Starling says are usually processed within seconds. Starling has also created an optional Starling Current Account, Starling Black, and Starling Silver accounts which offer additional features such as ATM withdrawals abroad for no extra charge, higher spending limits, and an instant overdraft of up to £1000.

New Starling customers get eight free Starlings in the first month and Starling also offers Starling Black customers free ATM withdrawals abroad.

Customers can set up Starlings using the Starling app which also shows Starlings that have been made to or from Starling accounts.

Starling’s Spending Insights feature shows Starling customers how Starling has interpreted their spending patterns. Starling users can also receive real-time balance notifications when Starling accounts are in the negative or Starling customers have made a deposit into Starling accounts.

About Monzo.

Monzo is a digital-only bank headquartered in London, England. Monzo was founded by Tom Blomfield, Jonas Huckestein, and Gary Dolman in 2015. Monzo initially started as a pre-paid debit card provider before eventually moving to a current account offered through its app that offers real-time notifications, spending categorizations, and spending breakdowns.

Monzo received its banking license from the Bank of England in March 2017 and is regulated by both the Financial Conduct Authority and the Prudential Regulation Authority.

In April 2018, Monzo announced that it had one million customers as well as a £1 billion lending limit from the Starling Bank. On June 16th, 2018 Starling Bank announced it would be buying Monzo in an estimated £150 million all-share deal, Starling CEO Anne Boden said this was “the logical next step” for Starling.

Starling will also receive an extra £71 million if Monzo hits certain performance targets by April 2020. Monzo has received $85 million of venture capital funding over three rounds in 2015, 2016, and 2017.

Features Of Monzo

Monitor your Monzo transactions anywhere, anytime. Monzo works on smartphone app. Monzo has also a version for the Web browsers so you can use it using a PC or laptop.

Monzo Bank’s main purpose is to just keep track of how much money you have spent and Monzo won’t charge you a fee. Monzo doesn’t require any minimum balance, Monzo will pay you interest of 0.5% for money that Monzo holds on your Monzo account.

Monzo is a banking alternative, Monzo app allows you to set up standing orders which are there to protect you from overdrafts or defaulting on bills by making sure they are paid on time. Monzo provides real-time notifications so Monzo is great for people who are forgetful.

It allows you to manage your Monzo money at the same time Monzo gives you Monzo’s own virtual card which Monzo offers contactless payments for Monzo it offers ATM withdrawals, bank transfers, and balance inquiries.

Monzo has Monzo Virtual Mastercard which is a Monzo debit card that offers contactless payments for Monzo it offers ATM withdrawals, bank transfers, and balance inquiries.

Monzo ensures the safety of your money with Monzo using two-step authentication where Monzo requires you to type in a code sent to your phone each time you log in from a new device. Monzo also offers Secure Key which is Monzo’s own physical debit card. Monzo card has a chip and a PIN number so it’s impossible to copy Monzo card.

Monzos bank has Open Banking API so Monzo can share data with other companies which means that Monzo has access to your transaction history with Monzo Payment’s API.

Monzos bank also provides access to external apps like IFTT (If this then that) app which can be used for many things like automatically translating emails into another etc.

Starling Vs. Monzo 2021

Starling is a London-based banking service with an app for online money transfers. Starling’s latest news includes a change of CEO, its first TV ad campaign, and the addition of personal loans to Starlings’ product portfolio. Starling will also be launching Starling Bank Japan in June 2020.

Starings claims it aims to be the UK’s first fully digital and open-banking platform, Starling has around 500,000 customers and currently offers savings accounts and current account products.

Starling also owns Starling Bank Canada which launched in July 2018. Monzo is a London-based banking service with an app for online money transfers and credit card payments.

Monzo’s latest news includes launching Monzo. me, a service that lets users send and receive money without sharing financial details; the launch of Monzo control center; Starling new CEO; Starlings TV ad campaign and Monzos’ partnership with Google which will make it easier for Android Pay users to add their Starling card to the new mobile payment system.

Let us differentiate on the following basis:

Try standards and regulations.

Starling is very compliant and Monzo might not be. Starling is also regulated by the FCA and PRA (Financial Conduct Authority and the Prudential Regulation Authority), while Monzo isn’t yet (since they haven’t bought Starling), which means you could rely on Starling, instead of Monzo’s regulatory practices.

Security.

Starling has a higher security standard than Monzo. Starling also respects the environment more than Monzo does.

Technology.

Monzo has not done much work with blockchain technology, Starling which seems like it has more expertise in the blockchain field.

Efficiency.

Starling was able to issue a personal loan product in less than 5 weeks from the application date, while it took Monzo over 3 months to issue a similar product, this shows how much more efficient Starling is at handling the whole process.

Interest-free Overdraft.

Starling also has successful insurance products under its belt, while Monzo’s are still in beta mode. Starling offers an interest-free overdraft of up to £500 without charging any fees or charges, making it more attractive compared to Monzo.

Ranking and Customer Base.

Monzo is currently the UK’s second-largest provider, with over two million customers and Starling is currently the fourth largest provider, Starlings’ products include a prepaid contactless MasterCard debit card. Starling also offers a savings account and a current account product. Starling says it aims to be ‘banking without jargon’.

Business Product.

Monzo recently launched Monzo for Business, a service aimed at small and medium-sized enterprises. Starling is yet to launch a business product.

Creditworthiness.

Starlings’ creditworthiness screening system is much stricter when it comes to taking on risks compared to Monzos’.

Rates.

Starling also offers market-leading credit card rates compared to Monzo. Starling offers 0% p.a for up to 60 months (3 years) on balance transfers, Starling also offers cards with an annual percentage rate (APR) of between 10.5% and 19.9%. Starling customers can track their spending using Starling Spend, Starlings’ mobile wallet app, unlike Monzo customers who can only track their spending while Starlings’ app is open.

Additional Features.

Starling spends also lets Starling customers pay for goods and services by scanning a QR code at the point of sale, this is not possible with Monzo. Starlings’ Spend app uses machine learning to forecast how much money people have left in their Starling account, so it knows how much they can spend before their Starling account runs dry.

Saving Facility.

Starling also lets customers set up Starlings’ Savers where users can set a desired monthly saving and Starling will notify them if they need to top up the Starling account with money which is not possible with Monzo.

Reserve Rate.

Starling changes the Reserve Rate for its current account from time to time whereas Monzo doesn’t currently charge interest for its current account.

Other Applications.

Starling offers the ability to send Starlings using Apple Pay and Google Pay while Monzo’s users can only use their Monzo cards with Apple Pay.

My Recommendations

Starling has Starling Spend, Starlings’ mobile wallet app, unlike Monzo customers who can only track their spending with Starlings’ app is open (if they choose to do so).

Starling Spend lets Starling customers pay for goods and services by scanning a QR code at the point of sale. Starling also offers market-leading credit card rates compared to Monzo.

Starling offers 0% p.a for up to 60 months (3 years) on balance transfers, Starlings’ customers can track their spending using Starling Spend, Starlings’ mobile wallet app, unlike Monzo customers who can only track their spending while Starlings’ app is open.

Starling changes the Reserve Rate for its current account from time to time whereas Monzo doesn’t currently charge interest for its current account. Starlings’ Spend app uses machine learning to forecast how much money people have left in their Starling account.

Starlings offer an interest-free overdraft of up to £500 without charging any fees or charges, Starling customers can set up Starlings’ Savers where users can set a desired monthly saving and Starling will notify them if they need to top up the Starling account with money.

Starling also offers market-leading credit card rates compared to Monzo, Starlings offer 0% p.a for up to three years on balance transfers, Starlings’ customers.

I lead product content strategy for SaltMoney. Additionally, I’m helping our broader team of 4 evolve into a mature content strategy practice with the right documentation and processes to deliver quality work. Prior to Instacart, I was a content strategy lead at Uber Eats and Facebook. Before that, I was a content strategist at SapientNitro, helping major Fortune 500 brands create better, more useful digital content.

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