Are millions of Britons really set to move to a digital-only bank?

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According to a survey by comparison site Finder, almost 13 million people could have an account with a digital-only bank like Monzo by 2024. But most don


Report suggests 13m Britons will have a digital-only bank account by 2024 – but are customers ready to ditch the big boys altogether?

  • Survey by Finder shows millions could open an account with digital-only bank
  • However, more than half have no plans to – and even 50% of Generation Z won’t
  • While a third say online banking is more convenient, 49% still like to have the option of talking to someone in person 

George Nixon For Thisismoney.co.uk

Millions of Britons could potentially open a digital-only bank account in the next five years, but one in five admitted they don’t know what one is, according to a new survey.

With nine per cent of British adults already in possession of an account with a digital-only bank, by 2024 almost 13million people could have one, data from comparison site Finder suggests.

A third of those surveyed who intend to go digital in the next five years said they felt banking online was more convenient, while 28 per cent said they would switch because it would be easier to transfer money.

According to a survey by comparison site Finder, almost 13 million people could have an account with a digital-only bank like Monzo by 2024. But most don't deposit their salaries in it

According to a survey by comparison site Finder, almost 13 million people could have an account with a digital-only bank like Monzo by 2024. But most don’t deposit their salaries in it

Unsurprisingly, people born after 1996 were the likeliest group to open an account with a digital-only bank. 

Figures suggest 15 per cent of ‘Generation Z’ had done so according to the survey, compared to just six per cent of adults aged between 54 and 73.

But while a further 21 per cent of those surveyed said they would consider a digital-only bank if they had more information, the research delivered mixed news for the challenger banks.

Just over half said they had no plans to open an account with a digital-only bank within five years, while one in five said they didn’t know what one was.

Even among the generation most likely to have one now, half of those born after 1996 said they didn’t intend to open one.

This comes after figures in October found that while nearly a quarter of a million Britons switched current accounts between April and June 2018, the most well-known challenger banks Monzo and Starling gained just under 4,500 new account holders in that time.

What’s more, even if someone were to open a new account with one of these banks it wouldn’t necessarily mean that they would use it, or use it as their main current account.

Monzo’s latest accounts in July showed that as well as making as £33.1million loss in its first full year with a banking licence, four in five of its current account customers did not deposit their salaries with it

The average deposit was less than £150 per account, although chief executive Tom Blomfield said that 40 per cent of new customers were depositing at least £500 a month.

Nonetheless, it appears that existing high street banks are still doing enough for now to retain their customers.

Three in five of those surveyed by Finder said the reason why they didn’t intend to open a digital-only bank account was because their current bank had treated them well.

Poll

Would you use a digital-only bank for your main current account?

The switch to digital was too much of a big step for 49 per cent, who said they liked to have the option of speaking to someone in person.

Jon Ostler, the chief executive of Finder, said: ‘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 Britons still aren’t interested in taking all of their finances online. 

‘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.’

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