Finding the digital bank that is right for you will largely depend on your personal finance needs and goals. You may want to check the bank’s licenses and guarantees. Whether they are FSCS protected, are there any hidden fees, and whether you can set up direct debits and standing orders can make a big difference.
By researching dozens of mobile challenger banks from the UK and worldwide, we have come up with a list of the best digital-only banks in the UK. We’ll start with the best banks for each category and move on to see what are the best digital banks in general.
When it comes to the UK’s digital banks, including Monzo, Revolut, Starling, Curve, and Atom, most of them offer 24/7 in-app support, which is leaps and bounds above the call-centre support provided by most traditional banks.
But what other features do UK digital banks offer that traditional banks don’t, and what should you look for when choosing the right digital bank for you?
When choosing a mobile bank, always make sure to check websites such as TrustPilot to see what the existing users are saying and what are the pain points of these banking apps.
The following challenger banks also have a standalone review on our website that you can check out as well.
Best UK digital bank overall
Starling
Although it’s seriously lagging behind Monzo and Revolut in the number of downloads and users, Starling Bank is the strongest digital banking app on the UK market right now.
We have nothing but words of praise for this challenger bank and would like to see even more people around the UK using it. Starling Bank really is that great of an alternative to your high street bank and the new kids on the block – neobanks.
With their core banking services staying free, we can wholeheartedly recommend them.
We see no reason why this shouldn’t be your primary banking account. Although it has no brick and mortar branches, the app’s ease of use and reliability doesn’t call for one either. You can track your spending and apply for financial services from the app itself.
Best current account
Starling
Voted the best current account four years in a row, and it leaves little to be desired. What we like the most about Starling personal accounts is that there are no monthly fees and no fees for using your card abroad or withdrawing money from ATMs.
Best paid personal account
Revolut Metal
Revolut’s top account offers everything and then some. The price of the Metal Account is £12.99, and the express delivery is free.
You can get your sleek Revolut Metal Card in 5 different colours that look amazing, although a bit understated. They are, of course, contactless and the whole Metal account offers a wide range of features.
You get access to 5 Junior accounts, cashback on metal card payments, up to £10,000/y purchase protection, ticket protection, returns protection, unlimited disposable virtual cards, and up to 0.65% AER daily interest rate on savings.
That Revolut is a jack of all trades is apparent in that it’s also offering crypto, stock, and precious metal trading.
Other Revolut Metal benefits include:
- the ability to spend in over 150 currencies at the interbank exchange rate,
- exchange in 28+ fiat currencies with no monthly limit,
- fee-free ATM withdrawals up to £800 per month,
- overseas medical insurance and delayed baggage and flight insurance,
- free lounge passes for your and up to 3 friends if your flight is delayed for 1 hour plus,
- and many more
Best digital bank for savings accounts
Atom
Savings accounts are the main feature of Atom Bank, and there is a range of Fixed Savers accounts available at competitive interest rates, which are clearly laid out online.
Amounts start at £1,000 (for fixed term) and the more you save, the higher the interest rate paid to you. No withdrawals are allowed at all until the account has matured. The savings period ranges from six months to five years. And the annual interest rate ranges from 0.15% AER for a 6-month term to 1.40% AER for 5 years.
Once your fixed rate saver account is open you’ve got until 9 pm on the same day of the following week to add your funds.
Best digital bank to get paid early
Monzo and Revolut
Both Monzo and Revolut offer this feature to their customers. You can receive your BACS payments, like your salary, one working day earlier than usual. It’s a shame that it’s not two days like it’s in the US, but hey, we’ll take it.
The best thing is that you don’t have to pay any fees or interest for getting paid a day early.
Best digital bank for metal cards
Monzo
The Monzo Metal card, which was made from a single sheet of stainless steel, is available only to Premium account users for £15 per month. It’s only available in white colour that looks very classy and distinctive.
The Premium account itself is full to the brim with features and benefits like worldwide family travel insurance, open banking – a feature that enables you to connect and manage accounts from other banks, advanced roundups for easy saving, and bill splitting among others.
You can also spend with your Monzo card anywhere in the world, for free. Withdrawals from ATMs are fee-free in the European Economic Area and other countries. You can take out £600 for free every 30 days.
Best digital bank for credit building
Pockit
Good credit history might not be important to you right now, but down the line, you could get better deals on loans, mortgages, and even mobile phones and furniture. You can build your credit history in a few clicks with Pockit
By signing up for Pockit’s LOQBOX, your monthly repayments are reported to the three main Credit Reference Agencies as you pay off the 0% APR loan over 12 months. You decide how much you want to contribute each month for a year — any amount from £20 to £200.
Best second chance digital bank
Monese
Banks usually ask for various documents as proof of address, like local utility or council tax bills or a rental contract in your name. With Monese, there’s no need for all that. All you’ll need is an email address, phone number and an ID.
There’s also no credit or income history check. You will have to take a short video selfie in the app to confirm your identity but that’s it. Easy peasy.
Best digital bank for cashback
Curve
Curve has a rewards program that they simply call Curve Cash. The program consists of a variety of cashback programs, and you can benefit from more than one program at once:
- Welcome Cashback, where you earn 1% cashback on almost every purchase made with your Curve Card for at least your first 30 days
- Curve Cash program where you pick 3-6 favourites from a list of over 100 popular retailers, including Amazon, Deliveroo, TfL, and more. Each purchase will give you a 1% cashback.
All you need to do to earn points is spend at one of the selected retailers. Once you’ve collected points, you can use them to make purchases anywhere you’d typically use your Curve Card, except at ATMs.
Best digital bank for international money transfers
Wise
Since its launch in London in 2011, Wise has focused on making international money transfers cheaper and more transparent.
Wise simply uses the best exchange rate that you can get and adds a minimal fee on top. This contrasts with big banks and other money transfer services like PayPal that add a massive markup to their supposedly “free” transfers.
Wise use their technology to link their bank accounts all over the world. In practice, that means that you’re not sending money directly to the recipient but to a Wise account that then transfers money in local currency to its destination.
The sender saves on fees, and the recipient gets the money for free in their local currency.
Best digital bank for investing
Revolut
Revolut lets you invest in fractional shares for as little as $1. Over 850+ stocks are available now and among them are such blue chips as Apple, Tesla, or the super-popular Zoom.
Revolut is also an excellent tool for beginners to get exposure to the all-encompassing BTC and other, to the general public, lesser-known cryptos. Revolut marks up a flat fee of 1.5% or 2.5% (depending on your account) to account for trading volatility for buying and selling cryptocurrencies. So, although it’s easy to invest in crypto via Revolut, it might cost you quite a penny.
The following cryptocurrencies are available on the platform:
- Bitcoin (BTC),
- Bitcoin Cash (BCH),
- Ethereum (ETH),
- Litecoin (LTC),
- Ripple (XRP),
- Stellar (XLM),
- EOS (EOS),
- OMG Network (OMG),
- 0x (ZRX), and
- Tezos (XTZ).
Besides cryptocurrencies, you can also buy commodities with the same ease. Commodities trading is available in Revolut from early spring 2020. Not only are they offering gold, but silver as well, and the exchange of other precious metals will be offered soon, so remember to check the commodities trading section in the Revolut app.
Best business account
ANNA Money
ANNA stands for Absolutely No-Nonsense Admin and is a digital business current account and assistant designed for small to medium-sized enterprises.
Their no-frills accounts are nearly the same across the board; the only difference is the monthly fee that depends on the size of your business. You can get a current business account in less than 10 minutes, and a debit card that miaows.
ANNA makes it possible to easily add funds to your business account via transfer using your sort code and account number. ANNA also has a handy invoicing tool that allows your clients to pay you directly into your ANNA account, and they will even follow up with a payment reminder to your clients.
Expense management, tax service, and reminders as well as open banking feature and integration to accounting software make it a value for money.
Best digital bank for freelancers
Wise
Wise has to be added to your freelancing toolbox. If you don’t like to leave your hard-earned money on the table for the big banks to scoop up, a simple Wise application is a few clicks away. Their transparent fee structure will not leave you guessing.
Wise is best known for its currency exchange and money transfers. They help you avoid sneaky fees and unfair foreign transaction fees.
Wise lets you keep almost all the money that you get paid for doing that hard work like writing, coding, video editing, etc. There’s no need to give banks a cut. They have enough money as it is.
If that’s not enough, you get to spend this money online or in-store with a debit card in the currency of the country you’re buying from to save on conversion fees.
Best digital banks in the UK
ANNA Money
About ANNA:
- Founded: 2017
- Founders: Eduard Panteleev (CEO), Andrei Pachai (CTO), Boris Dyakonov, Daljit Singh, Nikita Filippov, Slava Akulov
- Business accounts
Features:
- Open an account in minutes
- The app is easy to navigate
- 1% cashback on purchases
- 24/7 responsive in-app customer service
- Tax services
- Open banking
- Auto-match payments to expenses
- Get from 2 to unlimited debit cards
In a world that is getting more complicated by the minute, ANNA Money is trying to stand out with its business account and a card that actually miaows.
ANNA is a welcome addition to the already packed UK digital banking space. Its easy to understand pricing structure and accounts that grow as your business grows are refreshing to see.
The highlight of ANNA’s service is the slick app and all of the helpful features integrated into it that make business banking much more comfortable. Managing expenses and chasing up invoices is made so much easier when you use this app, and the option for multiple debit cards, even with the free plan, is undoubtedly a plus.
Atom bank
About Atom:
- Founded: 2014
- Founders: Anthony Thomson, David McCarthy, Mark Mullen (CEO)
- Savings, mortgages, and business loans
Features:
- UK’s first app-based bank
- Up to 1.40% AER
- Open a savings account with £0
- Unlimited withdrawals
Atom bank accounts are focused on savings and mortgages, which means it has no current account options and no bank card. This means it may not replace your regular bank yet but could offer you a great deal on a financial product instead.
Atom kicked off a new banking service style and does what it does well, with great savings accounts and mortgage offers available. Still, it lacks some of the features that most people rely on, such as a current account, so that it won’t replace your regular bank, for now at least.
Coconut
About Coconut:
- Founded: 2016
- Founders: Adam Goodall, Sam O’Connor (CEO)
- Bookkeeping and tax
Features
- Quick and easy to open an account
- Useful tools to help you stay on top of spending and declare income at the end of the financial year
- Tax estimation estimates how much tax you will owe at the end of the financial year.
- The option for a “Grow” account offers more advanced features that encourage business growth
- FCA-registered
Coconut offers a useful service for freelancers and small business owners, helping them stay on top of their finances with sophisticated automated features.
The Coconut app is designed to make business banking as straightforward as possible, and each feature is clear and easy to use. Earnings are the focus of this app, appearing on the homepage as soon as you launch it.
From there, users can click on different features to see a tax estimation based on their earnings, see an easy-to-understand record of their spending, and automated alerts where tax returns are due.
The option of a Side Hustle and a Professional account will appeal to those just starting with their business or those requiring a bank account for their side business, offering great assistance when planning taxes.
Curve
About Curve:
- Founded: 2015
- Founders: Anna Mostyn-Williams, Shachar Bialick (CEO), Tom Foster-Carter
- Personal accounts
Features
- Combine Your Cards in One
- Curve Customer Protection up to 100,000€
- Up to €600/m Fee-free foreign ATM withdrawals
- 1% Cashback
- Worldwide Travel Insurance
- Rental car collision waiver insurance
The Curve app is available in 31 countries in Europe – from the United Kingdom to Spain and Sweden.
Curve Blue is free with no monthly subscription. You will enjoy benefits such as 1 percent cash back from retailers such as Amazon and Netflix for the first 90 days of your plan. Curve Black costs €9.99 per month and offers 1 percent cash back from three selected retailers for an unlimited time.
Curve Metal will set you back £14.99 to get you a metal card, mobile phone insurance, rental car collision waiver insurance, worldwide airport LoungeKey access, and fee-free foreign ATM withdrawals up to £600/m.
first direct
About first direct:
- Founded: 1989
- CEO: Chris Pitt
- Parent bank: HSBC UK Bank
- Personal accounts, mortgages, loans, savings
Features:
- Current and savings accounts
- The option for cash deposits and withdrawals at HSBC branches
- Easy to set up and manage all payments
- iPhone users can make payments using Siri
- Extensive existing network of HSBC branches when needed
First Direct is an internet and telephone-based retail bank with its headquarters in Leeds, United Kingdom. First Direct has a long history of innovation in financial services beginning in 1989, launching the first online banking service in 2000.
In 2006, First Direct also launched a mobile phone banking service, before the invention of the modern first direct app.
First Direct has a great reputation as one of the first true innovators in financial services, which will undoubtedly provide many customers with peace of mind in their well-established internet banking and phone banking services.
The app makes all your everyday banking needs straightforward and fast; however, there is little else to do beyond the traditional banking functions.
gohenry
About gohenry:
- Founded: 2012
- Founders: Alex Zivoder (CEO), Dean Brauer, Louise Hill
- Partner institution: IDT Financial Services Limited
- Personal junior accounts
Features:
- $3.99/£2.99 per month
- Prepaid Visa or Mastercard
- Personalized card
- Easy to sign up and top-up
- Free trial
- Tasks and savings goals
- Available in the UK or USA
Teaching kids about money and budgeting was never easier with digital banking apps and gohenry has greatly contributed to that with their dedicated kids’ app and card. For a low monthly fee, easily top-up your kid’s account and teach them about savings and budgeting.
Gohenry is easy to sign up for and offers great features for both parents and their kids. It lets you set up the weekly allowance, set spending limits, control where the card can be used, and set up tasks that can earn your kids’ extra money. They even offer a one-month free trial to test the waters before you commit.
koto
About koto:
- Founded: 2020
- Founders: Dima Dubilet, Misha Rogalskiy, and Oleg Gorokhovskiy
- Personal accounts
Features:
- Instant transfers with faster payments
- No ATM fees
- No transaction fees
- Set up Direct Debits
- Track your spend
- Shake-to-Pay koto users nearby
The newest addition to the UK challenger scene, koto, is looking to acquire its first 50,000 customers.
koto is a simple mobile payment account with no fees for ATM, transactions, top-ups, or membership. If you’re eligible for credit (check on their website), you have two options with competitive rates and transparent fees. It’s a solid addition to the mobile banking space.
If you’re often strapped for cash and need that injection of money to get you further, koto is exactly what you need, if you’re eligible, of course. If not, you still get to use the account as a top-up card if you don’t opt for getting your salary directly to it.
It really is a no-frills credit card, basically with limits of £500 and £1,000. The Mastercard doesn’t come with any fees, including no monthly or annual subscription fees or transaction and ATM fees. It’s great for using at home or abroad.
Mettle
About Mettle:
- Founded: 2018
- Founders: Charles Wood, Rachel Booth
- CEO: Marieke Flament
- Business accounts
Features:
- An application can be completed within minutes
- Completely free to sign up, set up, and maintain a UK business bank account
- The invoicing feature allows customers to draw up invoices and send them in an instant
- Expenses are easily managed, and receipts can be uploaded quickly
- Customers can set up daily banking tasks in the app
- The freeze and unfreeze feature allows for extra security
Mettle’s free UK business account will be tempting for an array of customers, from freelancers, to self-employed to small businesses.
The lack of fees across the service is a unique selling point when it comes to UK business accounts, and makes it far more accessible compared with the services that have long been offered by traditional financial services.
The app itself shows great potential, making many typical business banking operations incredibly easy, from invoices to expenses. The tasks feature a unique innovation in the digital business banking landscape.
Molo
About Molo:
- Founded: 2017
- Founder: Francesca Carlesi (Co-CEO) and Leo Grünstein (Co-CEO)
- Mortgage
Features:
- Quick online signup
- Fast online mortgage application that can be completed within minutes
- They are changing the UK’s mortgage landscape
- A much more accessible and fair mortgage service
- Easy to use online experience
- Mortgage options for limited companies
- Options to overpay
- Highly-rated customer service
Molo offers an incredibly convenient and accessible mortgage service for those looking to buy to let. It is completely evolving the process of obtaining a mortgage, which has traditionally been a long and relatively unpredictable process.
The ability to apply for a mortgage online and receive approval within minutes lessens the chance of investments to fall through, as long as you meet all of the eligibility criteria. Molo is currently receiving great customer reviews making it an appealing option for those wanting to buy to let.
Monese
About Monese:
- Founded: 2013
- Founder: Norris Koppel (CEO)
- Personal accounts
Features:
- Users do not need proof of a physical address, utility bills, or credit history to open an account
- Easy to use
- Complete electronic transactions
- Link MasterCard debit card for in-person purchases
- Multi-currency options (€ or £)
- Free cash withdrawals
Monese became one of the first all-digital challenger currency institutions in the UK in 2016. Over one million customers within the EEA (European Economic Area) rely on Monese for their banking needs, with over three billion transactions completed each year.
Monese allows users the option to open a currency account without having to provide proof of address and submit a credit check. Although many people refer to Monese as a banking solution, it is not a bank in terms of federal regulations.
Monzo
About Monzo:
- Founded: 2015
- Founder: Gary Dolman, Jason Bates, Jonas Huckestein, Paul Rippon, Tom Blomfield
- CEO: TS Anil
- Personal and business accounts
Features:
- Available in the UK and US (waitlist)
- Get paid one day early
- Sort your salary into different categories like bills, savings, and spending
- Budgeting feature
- Joint accounts
- There are no fees for overseas spending
- Receive cashback if they switch their energy providers by using the app
- Overdraft protection of up to £3000
Monzo currently serves nearly 5 million customers, and around 40,000 accounts are opening from week to week. Monzo aims to be the fastest-growing bank in the United Kingdom and has plans to begin operating in the United States soon.
In an attempt to provide a better banking experience to customers, Monzo first launched in London in 2015. Their strategy of offering free bank accounts to young customers without the hassle of a credit check proved to be effective.
These accounts come with a sort code, deposit security, and a banking licence. There are no long forms to fill out, nor are there any physical branches.
If you’re looking for a better banking experience, you should consider Monzo bank. You’ll get around-the-clock customer service, deposit protection, a cool app loaded with features, and a debit card available for use.
Payoneer
About Payoneer:
- Founded: 2015
- Founders: Yuval Tal
- CEO: Scott Galit
- Business accounts
Features:
- Easy to sign up online
- Good choice for SMEs and freelancers
- Free prepaid Mastercard
- Connects to a wide range of marketplaces
- Flexible withdrawal options
- No account fees if used fairly regularly
Payoneer is a popular option for businesses and freelancers. They offer a prepaid Mastercard so you can spend your money directly from the account.
They’ve partnered with so many e-commerce marketplaces that it’s easy to get paid for your services, products, or rentals, for example. Airbnb, Amazon, Booking.com, Fiver, Upwork – you name it, Payoneer has got it.
Payoneer is universally accepted that nearly everyone that has some kind of business online has a Payoneer account. The Payoneer app works great, and if you need a debit card, you can order one free of charge, although the card is not the cheapest one to use in some cases.
Paysend
About Paysend:
- Founded: 2017
- Founders: Abdul Abdulkerimov, Ronald Millar (CEO)
- Personal and business accounts, money transfer
Features:
- Easy to sign up online
- Transfer money to over 90 countries
- Fixed fee
- Paysend link
- Instant processing
- Paysend Global account
- Paysend Smartcard
- Business accounts
First established in 2017, Paysend has quickly made a name for itself as one of the latest generations of modern money transfer services on the market. By offering a card payment service to other cards and bank accounts, the company has only grown in strength and users thanks to its innovative approach to transferring money.
By focusing on ‘next generation’ money transfer services, Paysend has been able to offer their customers an experience that can’t be achieved at a traditional bank or online payment service, allowing for quick transfers and requests with minimal effort. The service is available on both desktops and as a mobile app for the ideal convenience level.
Pockit
About Pockit:
- Founded: 2012
- Founder: Virraj Jatania (CEO)
- Partner institution: PayrNet Ltd
- Personal accounts, money transfers
Features:
- Open account in 3 minutes online
- Credit builder
- Cashback rewards
- Send 32 currencies to 55 countries
Pockit is a great all-rounder that offers convenient banking to a wide variety of customers, particularly those who have struggled to open accounts with more traditional banks.
However, some customers may struggle to get by with Pockit alone due to the lack of loans and fewer savings options than other platforms. Pockit is worth a look.
Pockit offers a bonus of up to 10% cashback in many popular shops and restaurants, including Pizza Express and Argos, when you pay with your Pockit card. This can make a big difference to your finances if you enjoy shopping and take the sting out of the bill at the end of a big meal.
Revolut
About Revolut:
- Founded: 2015
- Founders: Nikolay Storonsky (CEO) and Vlad Yatsenko
- Personal accounts (spending, saving, junior, crypto), business accounts
Features:
- Budget & Analytics
- Get paid early
- Crypto trading
- Savings Vaults
- Up to 4.64% interest rate
- Donations
Revolut is a challenger bank that made a ripple effect in the stale banking markets across the world. It has now expanded to all corners of the world and is finally profitable.
With their groundbreaking app, you can transfer money all over the world, invest in crypto, stocks, and commodities (gold and silver), get travel insurance, exchange money with no hidden fees, and so on.
Revolut has become a global player in the neobanking world and has introduced many features that other challenger banks have started copying. While the company has to work out some kinks, it does offer plenty of incentives for you to switch to their slick app.
RoosterMoney
About RoosterMoney:
- Founded: 2015
- Founder: Will Carmichael (CEO)
- Junior accounts
Features:
- For ages 3+
- 1-month free trial
- £24.99 per year
- Chore management system
- Prepaid Visa debit card for kids
- Educational content & resources
- Star & reward chart
- Flexible card controls for parents
RoosterMoney was launched in 2016 and is now available in over 50 currencies. It has three tiers:
- Virtual Tracker (free)
- Rooster Plus (£14.99/y)
- Rooster Card (£24.99/y)
If you have a 3-year-old at home, start with the free Virtual Tracker. It’s a star or reward chart to help reinforce positive behaviours from a young age. You get to track tasks and behaviours with stars that kids can trade in for rewards.
When you’re ready to track chores, you can upgrade to Rooster Plus, incentivising saving and earning by tying kids’ pocket money to chores. You can even set up an interest rate on their Save pot and reward them for the money they set aside.
Rooster Money is a good choice for your kids because it grows as they grow.
Starling
About Starling:
- Founded: 2014
- Founder: Anne Boden (CEO)
- Personal and business accounts
Features:
- Voted Best Bank for the last 4 years
- Free online signup
- No monthly fees
- Joint and Euro accounts
- Personal and business loans
- Overdrafts
- Cheque deposits
- 0.05% AER on balances up to £85,000
- An all-human, UK-based support team
- Kids and teen accounts
Starling Bank is a digital challenger bank that is headquartered in London, UK. It’s the brainchild of Anne Boden, a Welsh tech entrepreneur, who founded the neobank in 2014 under the name Possible Financial Services.
It rebranded as Starling in January 2016 and received its UK banking license the same year.
It won the Best British Bank award in the British Bank Awards four years in a row (2018, 2019, 2020, and 2021). With so much competition from the old guard and the new challenger banks, the awards really speak volumes.
With their core banking services staying free, we can wholeheartedly recommend them.
Suits Me
About Suits Me:
- Founded: 2015
- Founder: Matthew Sanders (CEO)
- Partner institution: Contis Financial Services Ltd
- Personal accounts
Features:
- Easy to open
- No proof of address needed
- £4.97 or £9.97 per month
- Saving and budgeting features
- Cashback rewards
There’s plenty of people in the UK that can’t open a bank account for one reason or another. Maybe they just moved into the country, or they have a bad credit score. Suits Me is focusing on this niche market.
If you cannot open an account with a high street bank or other digital banks like Starling or Monzo, Suits Me bank is an okay choice that offers a no-frills account with unexpected and, in our opinion, unnecessary fees.
All Suits Me bank account holders get a current account and a contactless Visa debit card with a secure online banking facility and free mobile banking app to manage their finances.
Tandem
About Tandem:
- Founded: 2015
- Founder: Matt Cooper, Michael Kent, and Ricky Knox
- CEO: Susie Aliker
- Savings accounts, loans, mortgages
Features:
- Easy to open
- Autosave function
- Green loans
- Mortgages
- Deposits protected up to £85k
- Open banking platform
Tandem didn’t have just three co-founders, they had 11,000 of them. They acquired a banking licence as early as 2015 but had to give it up after the UK retail chain House of Fraser withdrew its planned £35 million investment.
In such a competitive market, Tandem really has to up its game and add more features to its portfolio and not continue to take features out of the app. Its discontinuation of credit cards did not sit well with customers and has left a sour taste in the mouth for many which are reflected in users’ reviews.
According to the latest reporting, as of February 2020, Tandem Bank had approximately 800 thousand customers.
Tide
About Tide:
- Founded: 2015
- Founder: George Bevis
- CEO: Dr. Oliver Prill
- Business accounts and registration
Features:
- Easy to open
- Allows you to pair your app with your other accounts
- Spending categorization
- Low fees
- Invoices can be created within the app
- Strong security features
- FCA registered
- Currently, international money transfers are not available
Tide is a UK-based digital financial services provider for small to medium-sized businesses. It was founded in 2015 by George Bevis.
Tide has to date acquired more than 300,000 customers in the UK. Its accounts are tailor-made for small and scaling businesses, as well as freelancers. Tide’s three different account types offer something for every business.
If you don’t have a registered company yet, Tide will help you register one for free and give you their business account also free of charge.
With Tide, you can order up to 35 Tide Expense Cards for your team and keep track of who’s spending what. Free Mastercards allow you to spend without fees in the UK, and abroad.
Wise
About Wise:
- Founded: 2011
- Founders: Kristo Käärmann (CEO) and Taavet Hinrikus (CEO)
- Partner bank: Community Federal Savings Bank
- Personal and business accounts, money transfer
Features:
- Free online account
- International bank details
- Send money to more than 70 countries, always with a low and transparent fee
- Direct Debits in the UK, Europe, and the US
- Spend in local currency with your card
- Receive your salary, pension, and more
- Pay at the real exchange rate
- Pay online securely with instant notifications
- Use your card in more than 200 countries and withdraw money from 2.3 million ATMs
Since its launch in London in 2011, Wise has focused on making international money transfers cheaper and more transparent.
By charging extremely low fees compared with high street banks and other online payment providers and using the real exchange rate when converting currencies, Wise has quickly become a top choice for both personal and business international bank transfers.
Wise got famous for transferring money in a fast, cheap, and transparent manner across the world. To think that other platforms or vendors charge from 5 to 13 times more for the same thing is really mind-boggling. No wonder that big banks are losing customers left and right.
On top of reliable money transfers, people and businesses can take advantage of many other benefits that a Wise account has to offer.
Benefits of digital banking
Digital banks are also called mobile banks, neobanks, challenger banks, online banks, and other similar versions of names.
The apps created by digital banks act as a one-stop hub for your finances, designed to provide greater visibility across your accounts and help you save, budget, and plan. They do this by providing real-time spending updates, regular spending reports, categorizing spending into bills, food, rent, etc. to help customers understand where they could cut down or when there is an opportunity to save.
Many of the UK’s digital banks also offer bill-splitting, saving accounts, and instant PIN-changing, aiming to make banking as simple as possible.
One of the challenger banks’ big attractions to many UK customers is that lots of them offer commission-free spending overseas and instant freeze and unfreeze options for optimal security, making managing finances while traveling much more accessible.
Unlike traditional banks, digital banks aren’t held back by age-old infrastructures that will take years to update, meaning digital banks are rolling out new features all the time to help customers stay on top of their finances.
Low to no fees
Digital banks also aim to uphold far more transparency in their service than traditional institutions. Many of the challenger banks offer free current accounts and more advanced options that come with a monthly fee.
The majority of these banks pride themselves on providing a service with no hidden fees. This “fee-free” service also extends overseas, with many challenger banks appealing to keen travelers with offers of no fees on international transactions and free cash-withdrawals abroad.
Digital-only banks still make money, but their business model doesn’t include ripping off their customers with excessive fees.
Higher interest rates
It’s a recognized fact that big banks will give you appalling interest rates if any. How does 0.05% sound to you? Digital banks can provide their customers higher interest rates on savings accounts because they save on overhead costs like retail space and bank cashiers.
You can even get an interest rate on your checking account balance in some cases.
Easy to apply
Is there anything worse than going to the bank? I put it up there with visiting the dentist. Luckily, with mobile banks, you get to open your account online without visiting the bank office and paying for fuel and parking.
Simply fill out the online form, upload your ID, take a selfie, and you can start banking.
Convenient
The ability to apply for a bank account online is not the only convenient thing. Pretty much everything else that involves your finances can be done from your sofa as well, including applying for a mortgage. Open your banking app, find the menu, and you’re halfway there.
Most UK digital banks allow new customers to sign up simply by downloading an app, entering some personal details, and authenticating their identity before being approved within minutes.
Not only is the process far quicker than with traditional banks, but it also makes their financial services more accessible to those who are often not applicable to traditional banks.
Budgeting and analytics
UK digital banks place a significant emphasis on helping their users stay on top of their finances. They do this through monthly reports, forecasts, notifications, budgeting goals, saving tools, etc.
Real-time spending notifications mean that customers can stay up-to-the-minute on their finances. At the same time, automated advice helps customers figure out what is safe to spend and what they can afford to save. These features have attracted many users to open an account, whether as their primary bank account or secondary.
Cashback
You don’t need a credit card anymore as some mobile-only banks offer cashback on everyday purchases. It was about time you got something back! You can even get cash back rewards in cryptocurrency now.
Drawbacks of digital banking
Digital banking isn’t perfect, and most of the independent fintech companies were only founded less than 10 years ago (some only a couple of years ago). So, there are still some teething problems.
Nevertheless, let’s look at some of the drawbacks to digital banks in the UK.
Customer service
This is arguably the most significant disadvantage over big banks. Because there are no physical branches, you have to do all your troubleshooting online. This can be a less than perfect solution, especially if you have a time-sensitive and costly problem to deal with.
Although all the apps have a chat function, sometimes there might be a substantial waiting period, or there’s only a chatbot available to answer your questions. Granted, some big banks are offenders as well.
Fewer financial products
Some digital banks have a barebones account with just a few add-ons and that’s it. That doesn’t necessarily have to be bad. Not everyone needs savings, investing, mortgages, loans, and so on from their bank account. Sometimes, simpler is better.
Fewer options for depositing
This one comes down to the lack of physical branches. If you have cash on your hands that you want to deposit into your account, you might find yourself at a dead end. The same goes for cheques, as all neobanks can’t scan a cheque with your phone.
How safe is digital banking?
Security is predominant when it comes to banking, and some may be concerned about how secure digital banks are. However, digital banks are at the cutting edge of innovation, and this includes security.
One of the expectations for many joining a bank is that the bank is FCA-approved (by the Financial Conduct Authority), and the FSCS protects customer deposits of up to £85,000.
This is the case with many digital banks, which are full-banks like Monzo, Starling Bank, Tandem bank; however, it is certainly something to check beforehand as some banks are FCA-approved but yet to receive FSCS protection.
When it comes to the security of your digital bank account, digital banks have proven that they lead the innovation of hi-tech ways to protect customer accounts. The digital banks make it easy to sign up to their services within minutes through their apps, however, they also use rigorous methods of authenticating user identities, such as fingerprint scanning, facial recognition, and voice recognition, and they will continue to adopt the latest security technology in the future.
Traditional banks are often following the lead of challenger banks when it comes to innovation, so this should provide digital bank customers with some peace of mind about their security.
What features do digital banks offer that traditional banks don’t?
- Quick and easy online application
- Approval within minutes
- No tedious paperwork required
- Advanced analytics features
- No hidden fees
- Fewer to no fees for transactions and ATM withdrawals abroad
- Savings accounts or non-savings accounts with interest
- Monthly reports and forecasting
- In-app customer service
- Bill splitting
How to get started with digital banking
The best thing about digital-only banks is that you can apply for most online accounts in 5-10 minutes or even less. Visit your mobile bank’s website and click or tap ‘Get Started’. You can also download the banking app from Google Play or Apple’s App store yourself.
To open an online personal banking account, in most cases you’ll have to have an ID or passport and be a resident. Although, some mobile banks don’t require you to be a resident in the country.
The bottom line
The UK has seen a rise in challenger banks over the recent years that are digital-only. These digital banks offer banking facilities via apps available to download on mobile and tablet, with no physical branches like traditional banks.
The service digital banks offer on their apps means that physical branches are not necessary. Several of the UK’s digital banks offer top-rated customer service online and automated processes and updates that help you keep your finances in check.
Although many still prefer to visit physical bank branches, digital banks’ benefits to help customers feel more in control of their finances are tempting millions from their existing traditional bank accounts. In fact, over two-thirds of banking customers plan to switch to digital banking in the future entirely.
In terms of current accounts, most UK digital banks offer a free standard current account option. However, some also provide more advanced plans for a small fee that offer extra benefits such as exclusive partner offers. All current accounts come with integrated budgeting technology, monthly reports, and advice, designed to help customers be more clued up about their cash.
You can opt for one of your saving pots or spaces to receive a good interest rate, with many banks offering withdrawals that will not cause you to lose your interest.
Another common feature is the round-up tool, which allows customers to turn their spare change in everyday transactions into savings that earn interest. Customer growth and financial stability are a priority in UK digital banking.
Adrian Volenik is a fintech enthusiast who loves testing and reviewing digital banking apps and financial products in general. How many digital banking accounts can one man have? Not enough, if you ask Adrian. As his wallet will soon explode if he doesn’t cut back on the number of cards.
