Digital banking adoption
How many people are switching to digital-only banks?
Would you switch your main current account to a mobile-only bank? People all over the country are increasingly opening bank accounts with digital-only banks such as Starling Bank, Monzo and Revolut, which have no bricks-and-mortar branches and allow you to control your finances from your phone. Every year we carry out digital-only banking adoption research to see what stage this potential revolution is at and to get a feel for what the British public thinks.
This year’s research showed that currently, around 12 million Brits have a digital-only bank account, and this number could almost double over the next five years. Digital banks aren’t all about banking, though. Some digital banks, such as Revolut, allow you to open a share trading account to trade stocks and shares commission-free. If you prefer to keep your investments separate to your banking, then we’ve compared the best trading apps to help you choose one that’s suited for you.
How many people have taken up digital bank accounts so far?
According to our survey, in 2020 almost a quarter (23%) of British adults have opened an account with a digital-only bank, equating to 12 million people. In 2019, only 1 in 10 Brits (9%) had a digital-only account, meaning there has been an increase of 165% in the number of people with a digital account over the past 12 months.
14% of Brits plan on opening a digital-only bank account within the next 12 months, and 7% intend to do so within the next five years. This means an estimated 11.2 million new accounts will be opened by 2025 and a total of 23.2 million Brits (44%) will have an account by 2025. One figure of particular significance is the number of people who are not considering opening a digital bank account. In 2019, over half (53%) said they are not considering switching from their traditional banks to digital banks. However, in 2020, this figure halved with under a quarter of Brits saying they have no intentions of opening a digital bank account.
Digital banking intentions: How many Brits are opening Digital Bank accounts?
Why are people switching to digital-only or sticking to incumbents?
We asked Brits who have already opened an account with a digital-only bank or intend to in the next five years why they made this decision. For the second year in a row, the convenience that comes with digital banking was named as the main reason for opening an account (41%).
Customers are also motivated by better rates that digital-only banks may offer, which is the second most popular reason for Brits opening an account (39%). The third most attractive reason is the low transaction fees when using these bank cards abroad (28%). Interestingly, a fifth of people (19%) said that liking the look of the card was a reason for getting an account.
For now, it seems that a lot of people still have no intention of switching to a digital-only bank account. 54% of our survey participants said they are currently not planning to do so. The top reason for Brits not going digital is that their current banks treat them well (65%). In addition to this, half of the customers who have no plan to go digital (51%) said that they value being able to visit a member of staff in a branch.
Challenger bank adoption by age group
As you might expect, the number of digital-only bank account holders is higher within younger age groups. Almost half (46%) of generation Z (those born after 1996) have a digital bank account, compared to just 12% of baby boomers (those born 1946-1964) and 2% of the silent generation (those born 1928-1945).
Generational difference in digital banking adoption
Uptake of digital-only banks by gender
A quarter of men (25%) have an account with a digital-only bank, compared to just 1 in 5 women (20%). In addition to this, men are more likely to go digital-only, with 24% aiming to open a digital-only account in the next five years and only 19% of women intending to do so.
The adoption rates of these challenger banks also depend on where you are in the UK
Londoners have the highest adoption rates in the country, with 39% of them having opened a digital-only bank account. This is over double the rate in Wales, where only 16% of people have opened a digital-only account, making it the most reluctant region to get involved with the banking trend.
Commenting on the findings, Jon Ostler, CEO of Finder UK says:
- Finder commissioned Onepoll on 10-15 January 2020 to carry out a nationally representative survey of adults aged 18+.
- A total of 2,000 people were questioned throughout Great Britain, with representative quotas for gender, age and region.
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