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Digital banking
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What's in this guide?
The days of going to a bank branch and standing in a queue so you can speak to someone are numbered. Mobile banking puts your finances at your fingertips 24/7. There’s a host of challenger banks, digital-only banks and personal finance apps available now, designed to give you better, faster control of your cash.
We’ve rounded up everything you need to know from reviews and product comparisons to news and video interviews with the key players.
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Digital banking deals for August 2020
Santander
Current account
Up to 15% cashback at a range of major retailers
Open your everyday current account with Santander today and get up to 15% cashback at a range of major retailers. T&Cs apply.
Starling
Award winner
Starling voted best British bank and current account
No branches, no fees, no paperwork. Get a smarter kind of bank account with the Best British Bank 2018 – all in under 3 minutes!
Plum
Money manager
Grow your money with Plum
Check out Plum App now and save money easily. T&Cs apply.
Read digital banking reviews
We review every digital bank, app and challenger. Our reviews are regularly updated to cover new features and releases.
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Latest digital banking news
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What is digital banking?
Digital banking is a way to control your money, usually through a smartphone app or web app. It allows you to log into your account anywhere with Internet access, giving you constant visibility of your money and helping you understand the best way to manage it.
Why should I use app-based banking?
There are several advantages to app-based banking:
- Banking access in your pocket
- Many companies offer 24/7 access to banking support
- Instant spending notifications
- Many banking apps offer ways to automatically save money
Another major benefit of app-based banking is the degree to which it has opened up the competition. The new Open Banking rules have enabled third-party apps to innovate, drawing on the infrastructure of traditional banks.
Things to know about app-based banking
Here are a few things that you may not know about using your mobile as your main point of contact with your bank:
If you want to share your information, your bank has to agree
Many banking apps are designed to help their customers save. These apps access your current bank accounts and use clever computer programs to analyse your spending and look for ways that you could save money.
Previously, you could ask your bank to give these apps permission to view your banking data and the bank could refuse. Now, as long as the app is properly licensed, your bank must grant access if you agree to it.
Different types of app-based banking
App-based banking is different to traditional banking in many ways. Unlike traditional banking, app-based banking covers a much wider definition of “banking”.
Current account apps
As part of the app-based banking innovations, a clear class of banking app has emerged: the challenger bank. Challenger banks are new, fledgling banks that are aiming to take on the big, traditional high street banks and change the way we save and spend money. Challenger banks such as Starling, Tandem and Monzo are similar to traditional banks in that they offer the full current account experience but with all the added benefits of an app-based bank.
Apps that help you save
One of the most common reasons for people heading away from traditional banks and towards app-based banking is how easy app-based banking makes it for people to save money. Several providers such as Plum and Chip offer automatic savings for customers. Plum’s clever computer program looks at your spending habits and income and identifies how much you can reasonably save each month and then helps you set up a direct debit to your Plum savings account for this same amount.
Prepaid card apps
Another way to use app-based banking to help you save is through the use of prepaid cards. Cards with banking companies such as Pockit, Cashplus and Tuxedo allow you to load specific amounts of money on to your card and even further segregate this money into “pots” to spend on different things. This way you don’t have access to too much money all at once and are less likely to fall for those expensive “impulse buys”.
Investment apps
Another popular way to use app-based banking is saving through investment. Apps such as Moneybox allow you to make weekly or one-off deposits to three risk-assessed categories of investments. Several of the app-based banks also allow you to sign up to a “round-up” where your account rounds up your purchases to the nearest pound and uses the change you would have received as an investment.
Traditional banking apps
App-based banking doesn’t only apply to challenger banks or money-saving banking apps, it’s also becoming increasingly possible to bank on your smartphone with traditional banks such as Barclays and Natwest, both of whom have highly-rated mobile apps where you can control your money.
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Starling offers two new subscription services to business bank account holders A digital banking Toolkit and US dollar account are now available to small business customers of the UK challenger bank Starling.
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Wirecard update: Customers can access accounts as watchdog lifts restrictions The UK's financial regulator allows Wirecard to resume operational activity after ensuring that customer funds are safeguarded.
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Wirecard insolvency: Continuing curbs mean some banking customers still can't access accounts FCA confirms restrictions are still in place after an investigation is launched into the payments firm in its native Germany.
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Revolut unveils new "financial super-app" The latest app update from digital banking challenger Revolut aims to provide customers with an easier way to manage their money.
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RBS to shut its digital challenger bank Bó The Royal Bank of Scotland's digital banking platform Bó is set to be closed just six months after it launched.