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).
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.
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
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
Charlie Barton is a publisher at Finder. He specialises in banking and investments products, including banking apps, current accounts, share-dealing platforms and stocks and shares ISAs. Charlie has a first-class degree from the London School of Economics, and in his spare time enjoys long walks on the beach.
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