Brits willing to flirt with digital-only banks, but not ready to commit

Offering some explanation for the preference, it was found that roughly two in five (37%) do not trust these new banks enough to allow them to share their financial data with other providers under the new Open Banking rules, suggesting that there is much more education for these industry innovators to do before gaining the trust of the nation.

The study, conducted by the price comparison site MoneySuperMarket, recognises a digital only bank as one that predominantly focuses on a mobile app experience and has no physical branches. Those that Brits are most aware of include Atom (19% having heard of the bank), Monzo (10%), Loot (8%), Revolut (7%) and Starling (7%).

Being built from day one as app-based banks has enabled the inclusion of now-popular developments, including real-time spending notifications, 24/7 in-app support and the ability to instantly freeze/unfreeze a card. The research shows that these are increasingly important features for Brits, with over half considering a bank’s digital services to be a major factor when opening an account - rising to 71% of those aged between 25-34. However, this trend hasn’t gone unnoticed by the high street banks as they rally to upgrade their digital offerings with new designs and a selection of their competitors’ features.

With two-thirds of Brits signed up with more than one bank for their financial services and one in five using as many as three banks, the data suggests that people are now used to the idea of shopping around for their money needs - yet many households could be missing out on unique products, and possible savings, offered by these challengers.

The research also discovered that Brits may not be ready for digital-only banks as they still prefer to visit their branch rather than use an app for the majority of common banking services, in addition to concerns about sharing data.

Unlike ‘traditional’ high street banks, digital-only banks have typically worked to grow the number of people signing up with them by perfecting one financial product before expanding further. However, the research shows that Brits are more comfortable signing up with these banks for certain services over others. Current accounts are twice as likely to be experimented with compared to any other product. Second to current accounts are credit cards and then new savings or ISA accounts with app-based banks.

And, in what might be seen as a sign of the growing trust in these young digital-only banks, roughly half of Brits suggested that they’d be likely to deposit their savings into one.

For more information about digital-only banks and to see the full report, visit  The Rise of Digital Only Banks page. To understand what advantages they can offer over traditional high-street banks and find answers to other frequently asked questions, see the guide to digital-only banks.