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UK Digital Banking Market Report 2025

UK Digital Banking Market Report 2025

Market Intelligence Reports Banking and Payments UK

UK Digital Banking Market Analysis

The UK Digital Banking Market has grown steadily, with digital-only banks like Monzo and Revolut gaining popularity among younger consumers but still facing challenges in capturing main account market share due to trust, security, and branch access concerns. Moving forward to 2025, digital banks are expected to innovate further, expanding their offerings and leveraging AI to attract more primary account holders, particularly in younger demographics.

UK Digital Banking Market Trends

Younger demographics, especially Gen Z and younger millennials, are increasingly drawn to digital-only banks for their innovative mobile apps and AI-driven financial tools.

Many consumers use digital banks for savings, budgeting, and day-to-day spending, with a growing willingness to pay fees for enhanced account features.

Trust, security concerns, and the lack of physical branches remain significant barriers to adopting digital banks as primary accounts.

Mobile payments are becoming more popular, and there is rising interest in fee-paying accounts that offer added perks like travel benefits and exclusive discounts, thus boosting the digital banking market size.

About The Report

The UK Digital Banking Market Report 2025 provides comprehensive insights into the digital banking market in the UK, offering valuable data on consumer behaviours, preferences, and market trends. It covers areas such as the adoption of digital-only accounts, the use of fee-paying tiers, consumer attitudes toward trust and security, and the growing importance of mobile payments and AI-driven banking tools. The research surveys a diverse demographic, including different age groups, income levels, and banking habits, to understand the evolving needs of digital banking customers. This Digital Banking Market Report will benefit financial institutions, digital bank operators, marketers, and investors by offering strategic insights to drive innovation, customer acquisition, digital banking market share and retention in the competitive sector.

Key Topics Analyzed in the Report

Ownership of all-digital bank accounts and comparisons to the major banking groups and high street brands.
Consumers’ reasons for using all-digital banks, from savings and budgeting to day-to-day spending and travel money.
Paid tiers of current accounts, with digital-only bank customers more likely to pay a fee for their account.
Barriers to using digital banks as the main account, including the lack of branches and why this is still an issue for some, followed by a lack of incentives and security concerns.
Attitudes towards digital banking, with younger demographics saying all-digital banks have better mobile banking apps than high street banks.

Report Attributes	Details
Published Date	August 2025
Data Range	2019 – 2030
Measurement Metrics	Revenue in £
Country Focus	United Kingdom (UK)
Consumer Data	1,950 internet users aged 16+, June 2025
Number of Pages	56
Market Segmentation	Current Accounts, Digital Bank Accounts, Fee-Paying Accounts, Mobile Wallets, Online Wallets, Bank Transfers, Direct Debits, Prepaid/Gift Cards, Buy Now Pay Later Services, Investments, Savings Accounts.
Leading Companies	Monzo, Revolut, Chase, Starling Bank, Barclays, Lloyds Bank, Nationwide Building Society, HSBC, Halifax, NatWest, Santander, Bank of Scotland, First Direct, TSB, Royal Bank of Scotland (RBS), The Co-operative Bank, Virgin Money (including Clydesdale and Yorkshire Bank), Metro Bank.

Meet the Expert Behind the Analysis

This report was written by Adrian Reynolds. Adrian has over a decade of experience working in research and insights. He joined the technology and media team in 2017, having previously worked as a TV analyst. Since January 2022, Adrian has focused on financial services and FinTech. He holds a BSc in Business Administration and a Master’s in International Business.

Digital banks have primarily been used as additional accounts. Alongside raising awareness, brands must incentivise customers to switch their main accounts.

Adrian Reynolds

Associate Director

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EXECUTIVE SUMMARY
- Opportunities for the digital banking market
- Give customers more incentive to switch their main accounts
- Lead the way in banking app innovation to make up for the lack of branches
- Digital banks can make customers comfortable with fee-paying accounts
- Market dynamics
- Digital-only bank accounts have largely been used as additional accounts
- Graph 1: current account ownership, by provider, 2025
- What consumers want and why
- Tailored fee-paying accounts can engage younger customers
- Graph 2: fee-paying digital accounts, 2025
- Customers are turning to digital-only bank accounts for savings and separating day-to-day spending
- Graph 3: reasons for using digital banks accounts, 2025
- Building trust in both the brand and level of service will be key in driving main account adoption
- Graph 4: barriers to paying income into all-digital banks accounts, 2025
- Monzo has the most upbeat brand image but digital banks must boost familiarity and differentiation
- Graph 5: perceptions of all-digital banks, 2025
- Consumers are still seeking the reassurance of face-to-face communication
- Graph 6: attitudes towards digital banking, 2025
- Innovation and marketing
- Financial services brand Zopa to bring added competition to the UK’s all-digital banking market
- Digital banks are looking beyond financial markets with plans to disrupt telecoms
- Monzo leads the way on advertising spend, after several years of strong investment from Chase
- Graph 7: total above-the-line, online display and direct mail advertising by digital banks, 2022-25
MARKET DYNAMICS
- Market background
- Digital banks have established a strong presence but the Big 4 still dominate
- Digital-only banks have largely been used as additional accounts
- Graph 8: current account ownership, by provider, 2025
- Take-up of digital-only current accounts skews towards younger demographics
- Graph 9: digital bank current account ownership, by generation, 2025
- Monzo has continued to add new products and push fee-paying accounts
- Revolut is still awaiting its official launch as a bank in the UK
- Chase has been boosted by its banking experience in the US market
- Starling Bank continues to maintain profitability
- Market drivers
- Increase in inflation will concern households already struggling with the impact of higher living costs
- Graph 10: CPI inflation rate, 2021-25
- In the midst of an uncertain economic and geopolitical environment, consumer confidence remains fragile
- Graph 11: financial confidence index, 2020-25
- Graph 12: financial wellbeing index, 2020-25
- Younger consumers expect the role of digital banks to grow in the coming years
- Digital banks will have to overcome the continued consumer demand for branches
- The continued importance of cash could limit growth in all-digital banking
- Graph 13: payment methods usage frequency, 2025
- Cash usage will continue to fall, with growth in mobile payments evident
- Digital banks have work to do when it comes to data trust
- Graph 14: trust in financial services companies with financial data, 2025
- Digital banks can drive growth by engaging younger consumers with innovative AI financial tools
WHAT CONSUMERS WANT AND WHY
- Paying for digital banks
- Digital account holders are more likely to pay a monthly fee
- More tailored and thematic fee-paying accounts can engage digital bank customers but women may take more convincing
- Graph 15: fee-paying digital accounts, 2025
- Reasons for using digital banks
- Digital banks are well-placed to bundle additional travel perks
- Savings and separating day-to-day spending lead the way in driving the use of digital banks
- Graph 16: reasons for using digital banks accounts, 2025
- Customers still need greater incentives to make digital banks their main accounts
- Barriers to using digital banks for main accounts
- Digital banks must build trust in the brand and service to drive main account adoption
- Graph 17: barriers to paying income into all-digital banks accounts, 2025
- Digital banks can boost visibility and access to cash with branded ATMs
- Focus on security and incentives to counter the lack of branches
- There is opportunity for digital banks to disrupt how the sector rewards customer loyalty
- Perceptions of digital banks
- Monzo has the most upbeat brand image of the digital banks
- Graph 18: perceptions of all-digital banks, 2025
- Brand perceptions are more positive among digital bank customers
- Younger demographics view digital banking brands more favourably
- Attitudes towards digital banking
- Digital banks are leading the way in innovative mobile apps
- Digital banks must not underestimate the desire for human interaction
- Showcase strength of digital support to reduce concerns over contact channels
- Default to virtual cards to boost sustainability
- Graph 19: using mobile payments more then debit cards, by generation, 2025
- Partner with streaming brands to offer enticing fee-paying accounts
- Entertainment streaming subscription bundles could drive packaged accounts to the next level
INNOVATION AND MARKETING TRENDS
- Competitive strategies and launch activity
- Starling looks to increase in-app AI integration to boost the customer experience and financial understanding
- Revolut is integrating AI and expanding into mortgages
- Monzo adds contents insurance to its product offering and releases its first book
- Revolut looks beyond financial markets and looks to disrupt telecoms
- Monzo could also look to expand into mobiles
- Monzo reveals new Fraud Prevention Platform following FCA fine
- Digital banks looking to fight fraud with in-app calls and verification
- Starling shifts towards separate savings accounts
- Zopa to bring added competition to the UK’s all-digital banking market
- Advertising and marketing activity
- After several years of strong advertising investment from Chase, Monzo leads the way in 2025
- Graph 20: total above-the-line, online display and direct mail advertising by digital banks, 2022-25
- Social media advertising is playing a greater role as banks shift away from TV campaigns
- Graph 21: total above-the-line, online display and direct mail advertising by digital banks, by medium, 2025
- Revolut, Monzo and Chase are taking a varied approach to social media
- Football sponsorship can help digital banks to boost brand awareness
- Monzo TV campaign highlights the benefits of using the bank abroad
- Chase looks to promote savings options in latest TV campaign
- Revolut looks to brand building with latest TV adverts
APPENDIX
- Report scope and definitions
- Consumer research methodology
- Abbreviations and terms
- Nielsen Ad Intel coverage

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