How many Brits use challenger banks?

We've looked into how many people in the UK are switching to online only banks?

Would you switch your main current account to an online only bank? 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:

  • As of January 2022, over a quarter (27%) of British adults have opened an account with a online only bank, equating to 14 million people. This figure has not changed from 2021.
  • This means that 3 times more Brits have a online only bank in January 2022 than in January 2019 (9%).
  • 10% of British adults intend to open an account with a digital-only bank by the end of 2022, meaning the end of the year could see the number of Brits with a digital-only bank rise to 19 million (36%).
  • 18% of Brits plan to switch to a online only bank by the year 2027.
  • The age group with the most digital-only bank account holders is generation Z (41%), while the silent generation are the ones least likely to not consider switching over to a digital-only bank (65%).
  • 31% of adult men in the UK have a digital-only bank account – just slightly higher than the 22% of women who have one.
  • Nearly half (47%) of those who use them keep less than £1,000 in a digital bank, in 2019.

Picture not described

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.

Digital-only bank ownership 2022 2021 2020 2019
Already had a digital-only bank 26.60% 26.63% 22.90% 9.00%
Planned to switch to digital-only by the end of the year 36.20% 37.58% 36.80% 16.00%
Planned to switch to digital-only in the next 5 years 17.65% 16.88% 21.45% 16.00%
Total after 5 years 44.25% 43.51% 44.35% 25.00%

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.

Picture not described

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.

2022 Reasons for picking a digital-only bank
Doing all my banking online is more convenient 26.67%
Digital seemed to be the easiest option 23.50%
I want to transfer money more easily 21.02%
I like to receive real-time notifications on my spending 17.85%
I think the apps are better with digital-only bank accounts 17.51%
I will get better rates 16.38%
My friends and/or family recommended a digital bank 13.22%
I want free transactions abroad 12.54%
I want to be able to trade stocks and cryptocurrency 12.09%
I wasn't happy with the customer service from my current bank 11.75%
My friends and family have a digital bank 11.30%
I like the look of the card that comes with digital bank 11.07%
My traditional bank didn't handle the pandemic well 7.91%
I don't trust traditional banks 7.23%

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.

Reasons for not opening a digital-only bank
My current bank has always treated me well 55.37%
I prefer speaking to someone in person 35.63%
I don't trust new digital-only banks 24.77%
My traditional bank was helpful during the pandemic 16.47%
It is too much hassle to switch my main account 15.07%
It is too much hassle to open a new account 13.67%
I wouldn't get better rates 6.89%
I don't know how to open a new account 4.91%
I don't know how to switch banks 3.39%

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.

2022 Already had a digital bank account Plan to get one by end of year Plan to get in next five years
Gen Z 41.44% 13.81% 19.89%
Millennials 40.57% 14.90% 9.35%
Gen X 22.25% 12.02% 7.67%
Baby Boomers 15.22% 3.70% 4.98%
Silent Gen 7.45% 0.00% 1.06%

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.

2022 Already have a digital bank account Plan to get one by end of year Plan to get in next five years
Males 31.47% 11.89% 9.47%
Females 22.19% 7.52% 6.76%

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.

Region Currently have a digital-only bank account
East of England 29.73%
Greater London 39.93%
East Midlands 25.93%
West Midlands 27.67%
North East 24.69%
North West 20.18%
Northern Ireland 23.64%
South East 20.92%
South West 24.86%
Wales 30.21%
Yorkshire and the Humber 25.45%

Methodology

  • Finder commissioned Censuswide on 5th to 10th January 2022 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

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

More guides on Finder

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