How many Brits use challenger banks?

Would you switch your main current account to an online only bank? While the traditional banks are able to offer high incentives such as cash for switching, the challenger banks try to make the registration process faster and release more features. Our data shows that over a quarter of British adults have accounts with challenger banks such as Starling Bank, Monzo and Revolut. Read on for more statistics about the amount of Brits planning to switch over to online only banks in future.

The latest stats

According to our survey:

How many people have a digital bank account in the UK?

According to our survey, over a quarter (27%) of British adults have opened an account with a digital-only bank, equating to 14 million people. This figure is unchanged from 2021, but 16% higher from 2020’s figures, when almost 1 in 4 Brits (23%) had a digital-only account. It is also 3 times the amount of Brits who had one in January 2019 (9%).

Over the course of 2022, a further 5 million Brits intend to open an account with a digital bank. If all of those who intend to do so actually follow through, 36% of the UK population will have a digital bank account – equal to almost 19 million Brits – by the end of the year. Contextually, this means that for every group of 5 people, up to 2 will have a digital bank account open within the year. This number will also skyrocket within half a decade, as 4 million Brits plan to open a digital bank account in the next 5 years. This would bring the total number of Brits with a digital bank account up to 23 million by 2027.

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• Table

Why are people switching to digital-only banks?

We asked Brits who have already opened an account with a digital-only bank or intend to in the next 5 years why they made this decision. For the fourth year in a row, the convenience that comes with digital banking was named as the main reason for opening an account.

Customers are also motivated by the ease with which money can be transferred through digital-only banks, which is the third most popular reason for Brits to open an account (21%). 18% of Brits prefer digital banking because they like to receive real-time notifications on their spending, while 16% believed that they would get better rates. 11% of digital bank account owners switched because they liked the look of the card they’d use. Only 8% of those who have a digital banking account opened their account because their incumbent handled the pandemic poorly.

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• Table

Why aren’t people switching to digital-only banks?

Despite the above, it seems that a lot of people still have no intention of switching to a digital-only bank account. 73% of Brits don’t have a digital-only bank, and by the end of 2022, that would only decrease to 64% once those who intend to switch actually follow through. In 5 years, an estimated 44% of Brits will have a digital-only bank account – according to our survey. This also means that 56% of the nation will still be living with traditional banks.

When asked why they were reluctant to switch, a majority of our survey participants said that their current banks treat them well (55%). 36% said they prefer speaking to someone in person and a quarter (25%) stated that they simply don’t trust new digital-only banks. 7% worry that they might not get better rates and the lowest percentage of respondents (5%) claim that they just don’t know how to switch.

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Intentions to switch to digital-only banks – by age group

As you might expect, the number of digital-only bank account holders is higher within younger age groups. 41% of generation Z (those aged 24 and under) have a digital bank account, which is 5 percentage points down from 2021. On the other end of the spectrum, just 7% of the silent generation (those aged 76 and above) have a digital account (2 percentage points up from 2021).

As for which generation plans to switch to digital by the end of the year, millennials lead the way once again, with 15% intending to do so. 14% of gen Z will switch by the end of the 2022 and 0% of the silent generation will switch this year at all. Intentions over the next 5 years are similar. Gen Z lead, with 20% planning to go digital by the year 2027, much higher than the 9% of millennials who will do the same. As for the silent generation, just 1% will be going digital over the next half decade.

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Intentions to switch to digital-only banks – by gender

31% of men have an account with a digital-only bank, compared to under a quarter of women (22%). In addition to this, men are more likely to go digital-only, with 12% aiming to open a digital-only account in the next year and only 8% of women intending to do so.

Combining the responses of those who would open a digital account after getting more information and those who intend to open one in either the next 12 months or the near future, the total proportion of men who would get a digital bank account is 53%, compared to 36% of women.

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Which regions have opened digital-only banks?

Londoners have the highest digital bank adoption rates in the country, with 40% of them having opened a digital-only bank account. This is double the rate of North West England, where only 20% of people have opened a digital-only account, making it the most reluctant region to get involved with the banking trend.

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

Matt Mckenna
UK communications manager
T: +44 20 8191 8806

• Previous research: Digital banking adoption 2021

  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. It is not just limited to banks too. A range of apps are popping up like budgeting and saving apps. 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 14 million Brits have at least one bank account with a digital bank, and this number could increase by almost 10 million over the next 5 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 also 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, over a quarter (27%) of British adults have opened an account with a digital-only bank, equating to 14 million people. This is an increase of 16% from last year’s figures, when almost 1 in 4 Brits (23%) had a digital-only account. It is also 3 times the amount of Brits who had one in January 2019 (9%).

  Over the course of 2021, a further 5.7 million Brits intend to open an account with a digital bank. If all of those who intend to do so actually follow through, 38% of the UK population will have a digital bank account – equal to almost 20 million Brits – by the end of the year. Contextually, this means that for every group of 5 people, 2 will have a digital bank account open within the year. This number will also skyrocket within half a decade, as 3.1 million Brits plan to open a digital bank account in the next 5 years. This would bring the total number of Brits with a digital bank account up to 23 million by 2026.

  Almost half (47%) of Brits who own a digital-only bank account are also keeping £1,000 or less in them, with 3 in 10 (30%) holding less than £100 in their accounts. Across all digital-only accounts, the average amount held is £3,214.

  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 5 years why they made this decision. For the third year in a row, the convenience that comes with digital banking was named as the main reason for opening an account.

  Customers are also motivated by the better rates that digital-only banks may offer, which is the second most popular reason for Brits opening an account (15%). 14% of Brits prefer digital banking because they like to receive real-time notifications on their spending, while 11% were either recommended a digital bank by family and friends or were attracted to the low transaction fees when using these bank cards abroad. While 10% of digital bank account owners switched because they liked the look of the card they’d use, the least common reason was to do with COVID-19. Only 7% of those who have a digital banking account opened their account because their incumbent handled the pandemic poorly.

  For now, it seems that a lot of people still have no intention of switching to a digital-only bank account. 55% of our survey participants said they are currently not planning to do so, an almost 2% increase from 2020. However, this also indicates a 19% decrease from 2019. The top reason for Brits not going digital is that their current banks treat them well (58%). In addition to this, 36% of customers who have no plan to go digital said that they value being able to visit a member of staff in a branch.

  • Reasons for opening a digital bank
  • Reasons for not opening a digital bank

  Uptake of digital-only banks 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 aged 24 and under) have a digital bank account, which is unchanged from last year. On the other end of the spectrum, just 6% of the silent generation (those aged 76 and above) have a digital account.

  • 2021
  • 2020

  Uptake of digital-only banks by gender

  30% of men have an account with a digital-only bank, compared to just under a quarter of women (24%). In addition to this, men are more likely to go digital-only, with 14% aiming to open a digital-only account in the next year and only 8% of women intending to do so.

  Combining the responses of those who would open a digital account after getting more information and those who intend to open one in either the next 12 months or the near future, the total proportion of men who would get a digital bank account is 32%, compared to 26% of women.

  Our research also found that on average, men are keeping £3,649 in their digital-only accounts, which is higher than the £2,717
  that women say they would hold in their digital-only bank account.

  • Graph
  • Table

  Gender	Average amount in digital bank
  Male	£3,649
  Female	£2,717

  The adoption rates of these digital banks also depend on where you are in the UK

  Londoners have the highest adoption rates in the country, with 46% of them having opened a digital-only bank account. This is nearly triple the rate of South West England, where only 16% of people have opened a digital-only account, making it the most reluctant region to get involved with the banking trend. Last year, Wales was the region with the lowest percentage of those willing to switch to digital banking, but the area now sits in the second-lowest spot on our list, increasing to 19%.

  Commenting on the findings, Jon Ostler, CEO of Finder UK, says...

  “Last year’s research showed that digital-only banks were gaining traction, but this year’s research shows that they should now be viewed as true competitors to incumbents. The number of people who opened accounts over the past 12 months exceeded the intentions of those who took our survey previously, so the trend appears to be gaining momentum.

  “Of course, there are still many who have no plans to try digital-only banks. Some customers are satisfied with their bank and see no reason to change – especially with the big players significantly improving their app offerings recently. In response, the challengers are all playing to their budgeting, visualisation and spending insights strengths, and Monzo has gone one step further, offering an incentive which allows people to be paid a day early.

  “Research we previously carried out found that almost half of those with digital-only accounts kept less than £1,000 in them, so the challenger banks will need to keep innovating if they are to convince customers to use them as their main bank.”

• Previous research: Digital banking adoption 2020

  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.

  • Reasons for opening a digital bank
  • Reasons for not opening a digital bank

  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:

  “Last year’s research showed that digital-only banks were gaining traction, but this year’s research shows that they should now be viewed as true competitors to incumbents. The number of people opening accounts over the past 12 months exceeded the intentions of those who took our survey in 2019, so the trend appears to be gaining momentum.

  “Of course, there are still many who have no plans to try digital-only banks. Some customers are satisfied with their bank and see no reason to change – especially with the big players significantly improving their app offerings recently. In response, the challengers are all playing to their budgeting, visualisation and spending-insight strengths and Monzo has gone one step further, offering an incentive which allows people to be paid a day early.

  “Research we previously carried out found that almost half of those with digital-only accounts kept less than £1,000 in them, so the challenger banks will need to keep innovating if they are to convince customers to use them as their main bank.”

• Previous research: Digital banking adoption 2019

  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. We carried out a survey of 2,000 adults to see what stage this potential revolution is at and to get a feel for 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, the proportion of people opening digital-only banks is higher among younger age groups. 15% of generation Z (those born after 1996) have a digital bank account, compared to just 6% of baby boomers (those born 1946-1964).

  Challenger bank adoption by age group

  • Age group
  • Table

  Birth years	Age range
  Generation Z	1996+	18–22
  Millennials	1981–1996	37–22
  Generation X	1965–1980	38–53
  Baby boomers	1946–1964	54–72
  The silent generation	1928–1945	73–90

  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.

  Challenger bank adoption by region

  • UK Map
  • Table

  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 digital-only bank account

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  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 five years, which means an estimated 8.5 million new digital-only bank accounts will be opened by 2024.

  16% of Brits

  intend to open an account with a challenger bank in the next 5 years

  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.

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

  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.

  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 the spectrum we have East Anglia, where only 12% of people say the same.

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  Why are people switching to digital-only?

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

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  How many people are staying off the bandwagon?

  For now, it seems that the majority of people have no intention of switching to a digital-only bank account. 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 people that don’t intend on opening a digital-only bank account

  • Generational differences
  • Table

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

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  What’s keeping people from switching?

  The table below shows the top reasons why Brits don’t intend on opening a digital-only bank account.

  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’s too much hassle to switch my main account and change my direct debits, etc	22%
  I wouldn’t get better rates	17%
  It’s too much hassle to open a new account	17%

  Interestingly, it’s generation Z that appears to be the most satisfied with traditional banks, with 71% feeling like they’ve been treated well compared to 57% of generation X. 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, CEO of Finder UK

  Methodology

  • Finder commissioned Onepoll on 7–11 November 2019 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.