Digital banking adoption

How many people are switching to digital-only banks?

Last updated:

Picture not described
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 that have no brick-and-mortar branches and allow you to control your finances from your phone. We carried out a survey of 2,000 adults to see what stage this potential revolution is at, and get a feel of what the British public thinks.

How many people have taken up digital bank accounts so far?

According to our survey, 9% of British adults have opened an account with a digital-only bank, equating to 4.5 million people. As you might expect, this proportion is higher among younger age groups. 15% of generation Z (born after 1996) has a digital bank account, compared to just 6% of baby boomers (54–73 year olds).

Challenger bank adoption by age group

Birth yearsAge range
Generation Z1996+18–22
Millennials1981–199637–22
Generation X1965–198038–53
Baby boomers1946–196454–72
The silent generation1928–194573–90
The adoption rates of these challenger banks also depend on where you are in the UK. Londoners have opened the most digital-only bank accounts, with 14% of them having done so. This is almost triple the rate in the East Midlands, where only 5% of people have done the same, making it the most reluctant region to get involved with this trend.

% of people with digital-only accounts by region

Region Percentage
South West 9%
South East 8%
East of England 7%
West Midlands 12%
East Midlands 5%
Yorshire and the Humber 5%
North West 6%
North East 7%
Wales 6%
Scotland 9%
London 14%
Northern Ireland 13%

9% of Brits

have a bank account with a digital-only bank.

How many of us will go digital in the future?

7% of Brits plan on opening one of these bank accounts within the next 12 months, and 9% intend to do so within the next 5 years, which means an estimated 8.5 million new digital-only bank accounts will be opened by 2024.

This sample is significantly skewed towards the male half of the population. A fifth (21%) of men plan to open a digital-only bank account in this time period, compared to just 12% of women.

For millennials and generations X and Z the adoption rate in the next half decade will be about one in five. For baby boomers and the silent generation, this rate will be much lower, at 9% and 2% respectively.

16% of Brits

intend to open an account with a challenger bank in the next 5 years.
London is the region that’ll see the biggest increase in digital-only bank accounts, as 26% of Londoners say they’ll open such an account in the next half decade. On the other end of this spectrum we have East Anglia, where only 12% of people say the same.

Percentage of men and women who plan to use a challenger bank

Why are people switching to digital-only?

We asked Brits who have joined digital-only banks, or intend to in the next five years, why they made this decision. The table below shows their top 5 reasons.

Reason % of responses
Doing all my banking online is more convenient 33%
I will get better rates 31%
I want to transfer money more easily 28%
I want free transactions abroad 22%
I like to receive real-time notifications on my spending 22%

How many people staying off the bandwagon?

For now, it seems the majority of people have no intentions to switch to a digital-only bank account, as 53% of our survey participants said they don’t plan to do so.

Women are more reluctant to do this than men, with 58% of them saying they don’t plan on getting this type of account in the next five years, compared to 49% of men.

The most reluctant region is the East Midlands, where 63% of participants answered this way. Predictably, Londoners are the least reluctant, with only 40% of them vetoing the idea.

Age, however, was the most significant demographic factor, as seen in the chart below.

Percentage of each age group that doesn’t intend to open a digital-only bank account

Generation Percentage
Generation Z 50%
Millennials 43%
Generation X 47%
Baby boomers 64%
The silent generation 79%

What’s keeping people from switching?

The table below shows the top reasons people gave for why they haven’t opened digital-only bank accounts and don’t intend to.

Reason % of responses
My current bank has always treated me well 61%
I prefer having the option to speak to someone in person 49%
It is too much hassle to switch my main account and change my direct debits etc 22%
I wouldn’t get better rates 17%
It is too much hassle to open a new account 17%
Interestingly, it is generation Z’ers who appear to be the most satisfied with their traditional banks, with 71% feeling like they’ve been treated well compared to 57% of generation X’ers. Perhaps they haven’t been with their banks long enough to become frustrated with them.

“When you consider how long the banking industry went without any real technological advances or change to the status quo, the speed that digital challenger banks have established themselves has been very impressive. When done right, digital banking can offer customers the speed, convenience and transparency that is becoming increasingly important for consumers in most sectors.

“However, our research also showed that a lot of Brits still aren’t interested in taking all of their finances online. Open banking, for example, is only a year old and some people may not be comfortable with having their data shared between companies yet – the problems that large banks have had with ‘digitalising’ their services also doesn’t help the image of online banking.

“It will be fascinating to see how the sector evolves over the next few years, and if it can cope with the increasing consumer demand that we expect to see.”

– Jon Ostler, UK CEO at finder.com

Methodology

Based on a survey of 2,000 British adults commissioned by finder.com and conducted by research provider OnePoll in November 2018.

Click here for more research. For all media enquiries, please contact:

Matt Mckenna
UK Communications Manager
T: +44 20 8191 8806
matt.mckenna@finder.com@MichHutchison/in/matthewmckenna2

Related articles

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site