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? 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.
|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.
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|
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|
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%|
|Yorkshire and the Humber||25.45%|
- 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
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