Digital Banking Statistics 2024: UK Trends & Predictions

Learn the most current trends regarding how and why UK customers use these digital services.

Updated: January 14, 2024
Matt Crabtree

Written By

Matt Crabtree

 

If you aim to monitor or track your banking activity and spending from a digital app, make transactions from any global location, receive personalised banking, or use advanced tools to manage your finances, you're not alone.

Our financial experts note that individuals greatly appreciate digital-only banking services, such as digital and neo-banks. Users often prefer to access banking services through digital banking.

Traditional banks might have been popular, but with many branches closing, nowadays, digital banking is on the rise. Our professionals have done the research and have the facts you need to gain insights into the rise of digital banking.

This article will share our findings related to trends and predictions on digital banking and the most current digital banking statistics.

A Summary of Key Digital Banking Statistics

Our financial professionals have summarised key statistics for digital banking from 2020 to 2023.

Here are our findings:

  • More than 90% of British people used online banking services or mobile banking in the year 2023.
  • Approximately 25% of all UK payments were completed with contactless payments in 2020. This has increased by more than 20%.
  • 83% of British people use contactless payments.
  • 16% of over 55s increased their use of smartphone payments in 2020.
  • For 81% of British people, the most important factor for choosing online banking services is the quality of experience.
  • 23% of responses to a survey suggest that British people opened digital bank accounts when they wanted an additional account because it was easy.
  • 24% of British people have a digital-only bank account. Half of 18 to 24-year-olds have a digital-only bank account.
  • 12% of British people use their digital-only bank account as their primary bank.
  • 67% of British people preferred using online banking for daily requirements in 2022.

What Percentage of UK Account Holders Use Digital-Only Banking?

Approximately 24% of British people have bank accounts that function on digital-only platforms in 2023.

Although we estimate that nearly 45% of British people will have digital-only bank accounts by the time we reach 2028, some individuals do not want to use this service. A third of Brits will not be interested in this bank account between now and 2028.

What Do We Predict Will Happen With UK Digital Bank Accounts?

Multiple factors are innovating UK digital bank accounts. Artificial intelligence and chatbots are personalising the banking experience for UK users, which we predict will continue. Many people are using these services offered by digital-only banks.

For instance, nearly two-thirds of Generation Z use digital-only banks. Although this has decreased from 2022 by 10%, other generations are keenly using these services.

64% of millennials use app-based banking, and only 2% of Generation Z use in-branch banking. Considering this trend, it's expected that UK digital bank accounts will be favoured by many in the younger generations. Of those millennials who do not currently use digital-only banking, 17% will begin using it by the beginning of 2024.

Factors That Cause UK Individuals to Open Digital Banks

As traditional banks close in many local areas, many UK individuals turn to digital-only banks. 16% of individuals who opened a digital bank account switched because there were no physical bank branches in their local area.

For many older consumers (approximately half of those who made the switch), bank closures have forced them to create a digital bank account.

However, there are additional reasons British people are using these services. With convenient mobile apps that have an easy-to-use user experience, many prefer the simple interactions these apps offer.

It's with low overhead costs that digital banks can afford to extend many perks to their customers. UK individuals, therefore, look forward to low or no fees, zero minimum balance requirements and easy set-up processes without having to visit a high street bank.

Backing up this point, 20% of British people suggest getting better rates is one reason they opened their digital bank account.

Factors That Deter UK Individuals From Opening Digital Banks

Nearly one-third of UK individuals do not want to open digital-only banks. Some reasons include a lack of trust in the technology or software and a preference for human interaction when completing transactions.

20% of individuals who do not want to open digital-only banks are worried specifically about security when using the internet for banking, and a growing number of the silent generation prefer the customer service they receive. They consider this a key reason to continue using traditional banking.

Digital-Only Banking Trends: How They Have Changed

Digital-only banking trends have changed over time. Digital banking is slowly rising, with new digital-only banks appearing on the market frequently. There are around 50 digital-only or neo-banks available in the UK market. 

Between 2023 and 2027, we predict that the digital-only or neo-banking market will increase by 17.5%. Neo banks such as Monzo have gained millions of customers, with Monzo itself reaching 8 million in 2023 and Kroo Bank aiming to reach 1 million customers over a five-year timeframe.

How Does Digital Banking Platform Experience Affect Individuals?

Each generation values the digital banking platform experience differently.

While 46% of individuals over 55 highly value an excellent online banking experience and think of it as “highly important”, 26% of individuals aged between 18 and 24 shared this perspective.

The digital platform experience, however, can affect individuals significantly. It impacts their choice of bank. With machine learning artificial intelligence, many neo and digital-only banks can offer immediate assistance to individuals. It reduces the need to consult with customer service staff and keeps customers satisfied.

How Is Digital Banking More Than Just Online Banking?

Digital-only banking offers a vast selection of services and functions besides traditional and online banking services.

This difference means digital-only bank users can benefit from integrated financial management services into the platform. They can use smart budgeting software and tailored financial advice based on your transactions. 

With digital banking, you also access enhanced security benefits that protect your account when you pay, make deposits or use the account. With secure biometric access to your account, you can use the platform without concerns about security breaches.

Digital Banking in the Future: The Verdict

The steady increase in the popularity of digital banking is undeniable. Online banks and many banks offering services for digital banking means that convenience is offered to many UK individuals. It's also clear that digital banking experiences play a role in the popularity of these platforms.

Whether you're transferring funds from savings accounts to current accounts through digital channels or mobile devices or simply need to track your spending or complete actions such as paying bills, you can do this with these digital-only services.

Customer data shows that many people prefer using digital banking platforms, and with their handy tools and services, the benefits largely outweigh the drawbacks.

Related Guides:

UK Digital Banking Statistics: Trends and Predictions: FAQs

How Are Banking Transactions Made Easier With Digital Banking?

Which Services Are Offered With Digital Banking?

What Is a Risk of Digital Banking?

What Is the Most Secure Online Bank in the UK?

What Does It Mean If an Online Bank Is Financial Services Compensation Scheme Protected?

Why Are High Street Banks Closing and Are More Closures Predicted?

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