The best digital only banks and mobile banking apps

Digital banking allows you to conduct all banking needs such as payments, standing orders and reviewing balances online or on your mobile. Nearly all banks now provide a way to manage your accounts digitally, and there’s a growing number of purely digital-only banks that are shaking up the banking sector.

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 (FSCS) 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.

In the early 2010s, the explosion of digital tech combined with the launch of the Financial Conduct Authority’s (FCA) 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. Then there’s the fact that demand for digital-only banks is increasing, as more millennials seek mobile-friendly financial products.

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 via the app. 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 all in one place. Some digital banking apps also include features such as spending analysis, budgeting tools and automated updates on your transactions as they occur in real-time, and others even let you pay in cheques. If you want an app to specifically focus on your savings, read our guide on the best savings apps to see where might be best to start.

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.

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, so you won’t be left alone. The only difference is that you won’t be able to seek help face-to-face, which a lot of people are turning away from anyway, particularly in the current climate.

Starling Bank offers an app-based current account that can be accessed via mobile or desktop. It can be applied for in minutes, with no paperwork or branch visits – all you need is a smartphone and a valid photo ID. The standard account is completely free, too.

Features include instant notifications of whenever payments leave or enter your account, spending insights, savings goals and virtual piggy banks that automatically round up transactions to save the change, and the ability to split bills and settle IOUs with ease. Cheques can be deposited using your phone’s camera and cash can be paid in at Post Office accounts. It also offers interest of 0.05% on balances of up to £85,000.

There’s also the option to open a business account that offers additional levels of functionality, including the ability to integrate with popular accounting software (such as Xero and QuickBooks). Joint and euro accounts are also possible, and there are accounts available to children, too.

Personal current accounts (including joint and child accounts) are fee-free while in credit. Standard business accounts are also free, but they can be personalised with various add-ons for an additional monthly cost. These include the Business Toolkit, offering bookkeeping capability (such as the ability to create, send and match invoices, calculate tax and submit VAT returns) for £7 a month, and US dollar business accounts for £5 a month.

Starling is an independent, privately-owned bank that’s 24% owned by CEO and founder Anne Boden, employees and ex-employees. Other investors are Harry McPike, a global private investor, and Merian Global Investors, a public investor in the UK.

Starling Bank is FSCS authorised and fully regulated by the Prudential Regulation Authority (PRA), which means your deposits are protected up to £85,000 by the FSCS.

• 100% digital bank.
• An award-winning, app-based account.
• No monthly fees – a completely free personal 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.

Atom is an app-based bank that focuses on savings accounts, with mortgages and business loans available through brokers. Users simply have to download the app and they can apply for their chosen savings account in a matter of minutes, with no paperwork required.

The bank offers a variable rate instant access account and a range of fixed rate savers, with terms varying from six months to five years. All can be opened via the app in as little as 10 minutes; your identity is verified electronically, and you’ll need to link your current account to ensure seamless transactions.

Atom prides itself on being the UK’s first bank designed exclusively for mobile and doesn’t have physical branches, but its Customer Support Team can be contacted seven days a week (from 8am-8pm) via phone, email, social media or in-app chat.

Nothing! The app is completely free to download, and likewise, the savings accounts are free to open and manage.

Atom is a privately-owned company with a wide range of shareholders. These include BBVA and Toscafund Asset Management.

Atom Bank is fully authorised by the PRA, regulated by the FCA and has full FSCS protection, which means all savings held with Atom across its range of accounts are protected up to a total value of £85,000. In terms of its in-app security, it uses your face and voice as your password, offering a heightened level of protection.

• 100% app-based bank.
• ID is verified electronically.
• Biometric security features.
• Range of savings accounts available on the app.
• Mortgages and business loans available via brokers.
• Full FSCS protection.

Monzo is a digital-only bank that offers current accounts, savings products and loans, all through its easy-to-use app. Its current accounts offer features such as instant spending notifications, pots for separating funds and monthly spending summaries, and it’s possible to add other accounts for a complete spending overview in one place.

Loans can be applied for online in minutes – you’re free to choose repayment dates and have complete control from the app – and in terms of savings, current account users can create a Savings Pot with one of several providers. They’re then free to “round up” their spending with any change directed into the pot, or can opt for automated savings.

The basic current account is fee-free while in credit, and it still boasts a range of features including fee-free bank transfers, “pots” for separating money, instant notifications, spending overviews, free spending abroad and Apple/Google Pay functionality. Chargeable overdrafts can also be arranged, as can joint and business accounts. However, it costs £1 to make a cash deposit, which must be arranged at a shop displaying a PayPoint logo.

Other current accounts charge a monthly fee, but for enhanced functionality and features. Monzo Plus lets you add other accounts to the app and offers in-credit interest, custom categories, virtual cards, a credit score tracker and a range of other features, for £5/month. Meanwhile, Monzo Premium adds phone and travel insurance into the mix, as well as heightened interest on your balance, discounted airport lounge access, fee-free withdrawals abroad, five free cash deposits a month and an exclusive metal card, for £15/month.

Monzo is a private company founded by Tom Blomfield and funded by 30 investors, including Accel, General Catalyst, Thrive and Reference Capital.

Yes. Being fully licenced, regulated and authorised by the relevant bodies, all eligible deposits held in Monzo’s current and savings accounts are protected by the FSCS, up to £85,000 per person.

• 100% app-based bank.
• Fee-free and paid-for current accounts, with optional savings and loan functionality.
• Customer support can be easily accessed via the app or phone, with 24/7 support for emergencies.
• Full FSCS protection.

Digital wallets are apps that allow users to store details of their credit and debit cards in one place, and then make transactions from that one central location. This means they’re not current accounts themselves, but can offer a convenient method to manage those accounts.

An example of this is Curve. Curve allows you to connect multiple bank cards into one, giving you control over your finances from within one simple app. It works with Apple, Google and Samsung Pay for seamless contactless transactions, and it even allows you to send money from any account to a friend straight from the app itself. It also removes banks’ foreign spending fees when using the Curve app abroad, and offers instant cashback of 1% at hundreds of retailers.

These wallets aren’t typically covered by the FSCS, but money isn’t usually added to the apps – funds will always remain in your chosen accounts. That said, some (such as Curve) will offer additional protection and will cover any payments made through the app, and are regulated by the FCA as payment services providers.

The big high street banks also have banking apps, but in many cases they don’t have the same level of functionality as digital-only banks. Nevertheless, if you want the security of banking with a big name but still want app capability, here’s a quick run-through of your main options:

HSBC offers mobile banking via its app, with its Secure Key (either physical or digital) and Biometric ID systems offering two-factor authentication for heightened level of security. Additional features let you have complete control of your money via the app, with functionality including mobile cheque deposits, quick and easy transfers, Direct Debit management and simple loan/credit card applications.

The Barclays app offers a wealth of functionality, from standard features such as balance checks and payments, to spending controls, cheque deposits, card management features (including the ability to view your PIN and freeze your card) and the option to update your personal details from the app itself. It also offers app ID for another layer of security, both when talking to the bank and when they call you – a secure notification is sent to your device to check both parties are the real deal.

The NatWest and RBS app lets you easily see your current, savings and credit accounts in one place, and has the option to include accounts from other banks. It’s got face and fingerprint ID, spending overviews and lets you apply for products in the app, and it also allows for easy transfers between accounts, simple payments to contacts and Direct Debit management. However, it’s lacking in some increasingly common features, such as cheque deposits and personal detail updates.

The Lloyds Bank app offers everyday banking on the go, with fingerprint and face ID for enhanced security. You can easily see your transactions, change your address and pay other people, and can freeze your card if it’s been misplaced.

The Santander app offers a wide range of features, incorporating current accounts, savings, credit cards, mortgages, loans and investments, offering an exceptional level of control across the board. Face or fingerprint ID is again available, and its latest update My Money Manager offers an enhanced overview of your spending.

If you’ve got a poor credit history, you may find it difficult to be accepted for a bank account, and this includes digital varieties.

If this is the case, you may need to look for basic bank accounts, or guaranteed bank accounts that are card-based accounts offered by fintech companies. You can read our guide on how to get a bank account with bad credit for more information.