The best digital only banks and mobile banking apps | moneyfacts.co.uk
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The best digital only banks and mobile banking apps

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What is a digital-only bank?

A digital-only bank offers all its banking services online and through apps on mobiles.  Account support is provided through in-app and online chat with some digital banks also offering call centre support. Digital-only banks do not have physical branches.

As long as your digital-only bank has a UK banking licence and displays the Financial Services Compensation Scheme logo any deposits, including savings accounts and funds held in current accounts, should be covered up to £85,000 in the event the bank goes bust.

What are digital banking apps?

Digital banking apps or mobile banking apps as they can also be called, allow you to conduct your everyday needs for banking, borrowing and saving. They are accessed on a mobile device and allow you to see your account balances, make payments, transfer funds and apply for new financial products. Some digital banking apps also include features such as spending analysis and budgeting tools and automated updates on your transactions as they occur in real time.

Are digital banking apps safe?

Regulated banks and their digital apps will all do everything possible to make their apps secure. This includes familiar features such as security passwords and pins, but also newer technologies such as facial, speech and fingerprint recognition. This is captured during the set-up of your digital app using your mobile’s camera – simply put you are taking a selfie. If your mobile has Touch ID or Fingerprint scan, then this can also be used to securely verify you against the banking data held on your mobile.  You will also be asked to take picture of your photo ID.

A lot of digital banking apps will notify you almost immediately after you have made a payment. This means you can quickly spot a fraudulent transaction.

If you forget your pin and passcode then it is likely you can reset these by taking a new video of yourself. This is analysed immediately to your original set-up video to confirm your identity.

And, exactly like a traditional bank, using your common sense is essential, so don’t share your passcodes or leave these written down and be careful people do not see your login information. You can read more in our guide Seven rules to keep online banking safe.

What happens if I need help with my digital banking app?

The digital-only banks offer either a 24/7 call centre or in-app chat to help you in case you have difficulties with your account.

Why are there more digital only banks now?

In the early 2010s the explosion of digital tech combined with the launch of the Financial Conduct Authority’s New Bank Start-Up Unit in 2013 made good ground for the launch of new digital only banks. In 2018 further regulation called PSD2 was introduced with the aim of increasing competition through more finance and banking apps. Furthermore, demand for digital only banks is increasing as more millennials seek mobile friendly financial products.

What is digital banking?

Digital banking is the way of conducting your banking needs such as payments, standing orders and reviewing your balances online or on your mobile. Nearly all banks now provide a way to manage your accounts digitally.

How to get online banking

Your banking provider should provide you with information to sign up for online banking – this may come in the post or be provided as part of their online banking app. Be careful not to respond to emails you receive inviting you to sign up to online banking as these may be phishing for your personal details.

3 differences between a traditional and a digital-only bank

  1. Traditional banks provide a face to face service in their branches while digital-only banks use call centres and online chat functions
  2. Digital-only banking apps usually come with real time notifications of spending while traditional banks provide this information as part of your statement
  3. Digital-only banking apps provide additional features such as bill splitting, savings pots and future spending reports, traditional banks are catching up but these features are not always guaranteed

What features do digital banks have?

 

Featured provider Account features FSCS protected Find out more
  • The award-winning, app-based account.
  • No monthly fees - a completely free current account.
  • Spend flexibly - three-month interest holiday on the first £500 of an arranged overdraft.
  • Save and share - set money aside for your 'goals'.
  • Protect your money - a fully registered bank and a member of the FSCS, so any money you keep will be protected up to £85,000.

Your deposits with Starling Bank are protected up to £85,000 by the Financial Services Compensation Scheme (FSCS).

Find out more

  • Grow your savings, reduce spending on bills, and manage your money better.
  • Get started for free in 2 minutes.
  • Give your bank a brain. Plum uses the latest technology to help you be better off, effortlessly.
  • Plum's smart algorithm analyses your spending and helps you set aside money automatically, without thinking about it.
  • Stay on track and never pay more than you need on your bills. Plum will crunch the numbers and switch you in seconds.

Plum is not covered by the Financial Services Compensation Scheme (FSCS).

Find out more

  • Sign up for an instant access savings account (0.5% AER) and switch on Autosavings to start saving today
  • Autosavings helps you save money by using rules to find small, regular amounts to put aside each week
  • Choose the rules that work for you: rounds ups, safe to save or regular deposit
  • Round ups: round up your spending to the next pound and save the difference
  • Safe to save: we’ll analyse your income, budget and spending habits to help you calculate how much you can afford to save. Choose from five different savings levels to decide how fast you want to save
  • Regular deposit: make a regular deposit into your savings account with the tap of a button

Your deposits with Tandem Bank Limited are protected up to £85,000 by the Financial Services Compensation Scheme (FSCS).

Find out more

Download Curve app
  • Curve allows you to connect multiple bank cards into one
  • Curve works with Apple, Google and Samsung Pay. If your card previously wasn't accepted by any of these, just connect the card to Curve and add Curve to your mobile wallet. 
  • Control all your finances from within one app.
  • Curve have invented time travel. You can move purchases from one card to another up to 14 days after the payment has been made
  • Get instant, uncapped, 1% cashback from a choice of over 100 retailers
  • Remove your banks foreign spending fees when you using Curve abroad.
  • Pay HMRC bills with a credit card through Curve Fronted
  • Send money from any account to a friend in the Curve app.

Curve are not covered by the UK FSCS however no money is ever added to the Curve app. Your money will always remain in your chosen bank account. Curve will cover all debit and credit card payments for up to £100,000 with Curve Customer Protection. Curve are regulated by the FCA.

Find out more 
Enter code F4CTS on app sign up for £10 free


  • Chip connects to your bank account and uses a clever AI to decide how much you can save.
  • Every few days Chip automatically moves a small amount of money into your Chip account, so this pot builds up without you noticing.
  • The average saver puts aside £1,800 per year.
  • Withdraw your money on the same day.
  • You can turn your saving level up and down. Decide if you want to aggressively hit your goals, or slowly save up.
  • Or you can manually move as much money as you want into your Chip account, whenever you want. There is an upper limit of £10k per wallet
  • Connects to all major UK banks.
  • It take just 60 seconds to sign up.

Chip is not covered by FSCS protection.

Your funds will be held in an e-wallet in your name with Prepaid Financial Services Limited (Chip is their agent), which is authorised by the Financial Conduct Authority (firm ref. no.900036) for the issuing of electronic money.

 

Revolut
  • Used by 4.5m+ customers across Europe and Australia, to make massive savings on fees when spending and sending money abroad.
  • Open an app-based account in minutes. Hold and exchange 29 different currencies and spend anywhere with no fees in over 150 countries with a contactless MasterCard or Visa. Withdraw £200 per month free from international ATM (2% fee thereafter).
  • Premium plan offers exclusive card designs, overseas medical insurance, £400 free monthly ATM and unlimited FX transfers.

Revolut are not covered by the UK Financial Services Compensation Scheme (FSCS), however funds are hold in a segregated trust account with either Barclays or Lloyds. These two banks do offer FSCS protection, but only if you have not used your limit with them already through other payment or savings accounts. Revolut are FCA authorised and operate to their regulatory requirements under the Electronic Money Regulations 2011, and the Payment Services Regulations 2017. If Revolut become insolvent you will be able to claim your funds from the segregated account and the claims of customers will be paid above other forms of creditors.  

All your card transactions are processed by the Mastercard, Maestro, or Visa network and are protected by Mastercard, Maestro, or Visa rules.

Find out more

 

Disclaimer

The list of featured providers on this page is a selection of services available and gives you an idea of the kind of options available. You can find out more about the individual products by visiting any of the providers listed. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions.

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