NatWest launches new digital business bank Mettle to combat the challenger threat – is it any good and will firms be eager to try it?


Mettle was launched as a test last October and is now being rolled out in full. It is a standalone digital offering launched by NatWest, which does not have a banking licence – only an e-money licence like Tide. Since it comes without fees, the question arises – is it any good compared to other business bank accounts? 

The Royal Bank of Scotland group has launched a new digital business bank as it looks to combat challenger rivals and rid itself of a scandal that has dogged it for the last decade.

Named Mettle, it began life as a trial from NatWest last November, but is now available in a new competitive business banking world – although it is not strictly a bank, as we explain in detail further below.

There were 17,687 business account switches in the three months to June 2019, more than double than a year earlier, figures from the current account switch service shows.

However, it remains to be seen if sole traders and small businesses will be willing to head to a group which came in the firing line during the financial crisis for the way it treated SMEs.

Its controversial Global Restructuring Group unit stood accused of asset stripping distressed small business customers who looked to it for assistance between 2008 and 2013.

RBS’s ‘relations with its customers were often insensitive, dismissive and sometimes too aggressive’, but the idea that the bank had pushed business customers into administration to profit from their woes was dismissed, according to a final report by the Financial Conduct Authority in June.

Its foray back into the business banking world has been launched by RBS stablemate NatWest and under the name: Mettle.

It is a standalone business digital offering with its own chief executive, Marieke Flament, who used to run the European operations of payments and cryptocurrency firm Circle.

Mettle can thus be reasonably seen as the business version of the new digital bank NatWest is in the process of rolling out in a bid to compete for younger customers called Bó.

But while Bó’s debit card is bright yellow, Mettle’s is black though, perhaps unfortunately, not metal.

Mettle could be seen as RBS’s attempt to keep up with the likes of Revolut, Starling and, most notably, Tide, which has around 90,000 members and a 1.5 per cent share of the business banking market.

The entry of RBS’s offshoot is also slightly ironic given that a lot of these challengers have been able to grow their market share thanks to its own money – an £800million pot handed out in increments as part of the conditions of its bailout by the Government – which is designed to encourage business bank account holders to switch away from the biggest names.

But does Mettle offer anything new, and is it any good?

Account features

Alison Rose, previously head of commercial and private banking at RBS and now the bank’s first ever female chief executive, said last year Mettle was designed to offer ‘a different choice’ to customers about how they bank.

She said: ‘The main challenge facing all banks right now is how we shift from physical to digital, so what we’re trying to do with this is respond to customers telling us how they want to interact.’

In contrast to its parent NatWest’s existing offer, Mettle doesn’t have any fees.

Its other features according to its website allow you to easily create and send invoices from within your mobile app, gives you notifications when those are paid and match them to outstanding invoices.

On top of that, it claims to let you make your ‘bookkeeping and day-to-day accounting’ easier by letting you add receipts to transactions, export expense data and schedule payments.

And that, beyond a cleaner display common nowadays in app-based bank accounts, seems to be it at the moment, though perhaps you might expect that from a bank with no fees whatsoever.

By contrast, a more established business account provider like Tide offers more features but also levies a £1 fee on cash withdrawals, 20p on bank transfers and £1 on Post Office cash deposits.

Starling comes with no monthly fees or charges for electronic payments, domestic transfers or ATM withdrawals, but Post Office deposits cost £3 and withdrawals over the counter cost 50p.

Mettle currently limits your balance to £50,000 if you’re a sole trader and £100,000 if you run a limited company.

You can set up direct debits but not standing orders at the moment, with scheduled payments the only option on the front. It also doesn’t offer overdrafts.

NatWest’s own existing proposition comes with a minimum fee of £5 – though this can be delayed for 18 months with its start-up account – an overdraft, lets you deposit cash and cheques and make direct debits, standing orders and bank transfers, all subject to fees.

When is a bank not a bank?

While we have made the comparison with Bó, there is one significant difference between the two in that the former is actually a bank and uses NatWest’s licence, while Mettle is not and does not.

Instead, like Tide, it is an e-money firm.

This is why it can’t offer overdrafts, though Tide gets around this by being able to offer business credit.

More importantly, it means money is not protected by the Financial Services Compensation Scheme up to £85,000 in the same way that money deposited within a Starling or NatWest business bank account is.

The provider of the account is Prepay Solutions, not NatWest, which is only on the label through Mettle.

This means that money is deposited by Prepay Solutions into a ring-fenced client account, which means your money would supposedly not be able to be accessed by them were they go into administration.

Mettle is described in the dictionary as ‘a person’s ability to cope well with difficulties; spirit and resilience.’

There was plenty of that needed by small businesses during the financial crisis – especially those who fell into the clutches of GRG.