Millions of millennials across Europe have already signed up for new "app-only banks," The New York Times reports. It makes sense. Netflix's lack of storefronts gave it an agility advantage over Blockbuster, which was mired in the real world and couldn't adapt fast enough. Similarly, digital-only banks offer new ways to save money and monitor your expenses that traditional banks might not.

Earlier this year, open banking forced the U.K.'s largest banks to share their data with licensed startups. These so-called challenger banks are using this opportunity to pursue partnerships with other fintech companies to increase the range of services in the market and acquire more customers. Since these online banks don't have physical branches, they can pass on their savings to customers. Some offer fee-free savings and checking accounts; others have higher interest rates on savings and lower interest rates on credit.

Here a few options (in alphabetical order) that I found after some Googling. Each offers banking for small businesses, without brick-and-mortar branches.

  • Atom Bank. This app-only startup raised more than $514 million. Atom claims that its interest on savings accounts is the best in the market.
  • Bank Novo. While not yet launched, this startup puts entrepreneurs top of mind. Novo seeks to offer a better business banking experience by using artificial intelligence to help businesses better understand their finances. It claims to offer full integration with existing sources of data, but only time will tell the future of this upstart. 
  • Chime. This U.S.-founded startup announced in January that it reached 750,000 bank accounts and $2.5 billion in transaction volume while helping users save more than $70 million in 2017.
  • Monzo. A British startup offering checking accounts and ATM cards, Monzo lacks physical branches; everything is done through an app.
  • N26. This new bank based in Berlin offers similar features as competitors, but has key partnerships that differentiate it. Benefits include five free ATM withdrawals each month, travel insurance, purchase protection, extended warranty, and protection from mobile phone and ATM theft.
  • Revolut. Probably the most famous new bank challenger, Revolut's valuation shot up from $350 million to a $1.7 billion in less than a year. Its competitive advantage is services ranging from disposable cards to cryptocurrency exchange. The app is considered to be user-friendly, with 24-hour customer service and control over your account and cards.
  • Starling Bank. Starling is focused on customer spending habits. It allows you to set saving goals and custom security settings, like locking your card or restricting actions such as ATM withdrawals and online payments. Additionally, Starling's "marketplace" supports customers while choosing the best pension, mortgage, and insurance deals from other fintech companies.
  • Tandem Bank. This app analyzes customer spending and helps you manage personal finances and find better deals on utilities. Recently, Tandem launched fixed savings accounts with annual interest rates.

Are these new banks a smart choice for your business? Here are some things you need to consider when choosing to switch to an online-only bank:

  • Security. Make sure that any bank or credit union is fully secured (meaning they can't lose your money). Never use a bank that does not have such protections in place.
  • Fees. Try to find an bank that does not charge you any fees for basic account transactions. Avoid monthly fees, per check fees, and fees for account assistance (talking to a representative or using in-branch services). Don't be afraid to ask (or Google) to find out if there are hidden fees (which are unfortunately very common among traditional banks).
  • Ease of deposit. Since there are no branches, you will need to ensure your choice offers simple, fee-free, mobile deposit services to make deposits fast and simple. 
  • ATM fees. If you use your ATM card frequently, definitely consider the fees your new bank does or does not charge for ATM use.
  • Interest rates. Find an account that pays higher-than-average interest on your deposits and charges lower-than-average interest on your debts and credit cards.
  • Minimum balance requirements. Some accounts require you to maintain a minimum balance and can charge you fees accordingly.
  • Customer service. You can check this online by reading customer feedback, but I prefer the old-fashioned way. Before you choose a new bank, click on "customer service" or "help." Review how your issues are addressed, and confirm this works for you.