What Is A Digital-Only Bank?

A digital-only bank is one that provides all its banking facilities through free-to-download app platforms on mobile and tablets. There are no physical branches and their services are provided through automated processes and in-app chat.

As with a traditional current account, you get an account number and a sort code, and can receive and send money in exactly the same way. You’ll have a debit card and can set up standing orders and Direct Debits to pay bills and other commitments.


Why Would I Use A Digital-Only Bank?

Those who advocate for using them often say they feel they have greater control and visibility of their personal finances, as well as enhanced flexibility. Some of the on-the-go features they offer include:

  • Up-to-the-minute spending updates and forecasts
  • Alerts
  • Monthly reports
  • Commission-free spending abroad
  • The ability to instantly freeze and unfreeze cards
  • Bill-splitting
  • Instant PIN changes
  • The ability to make saving automatic
  • The ability to trade cryptocurrency
  • 24/7 support
  • Fast response times


Are They Safe to Use?

The sign-up process to digital banks is thorough and requires two methods of authentication as standard. What’s more, because digital-only banks are at the forefront of banking technology and innovation, they tend to offer the most advanced methods of in-app authentication and security. As well as a traditional PIN, access to your account is often authenticated by technology such as fingerprint scanning, facial recognition or voice recognition.

At the time of writing, the most popular banking apps are Atom, Monzo, Starling, Revolut and Curve. In terms of governing bodies and protection, Atom, Monzo and Starling are all approved by the FCA (Financial Conduct Authority) and protected by the FSCS (Financial Services Compensation Scheme), while Revolut and Curve are FCA approved but not currently covered by the FSCS.

If you lose your card, you can log into your account from any device and freeze your card immediately. You can also get in touch via 24/7 chat so someone will be able to help you, no matter what time of day or night.


Is Digital-Only Banking for Me?

If you like to visit a physical bank and have your affairs handled by a person, then digital-only banking is unlikely to be for you. Most high street banks now have their own apps, so you can choose to have an element of digital banking to complement your physical bank.

However, if you rarely use face-to-face banking and like to take advantage of the latest technology, it’s worth checking out what a digital-only bank can offer you. Shop around before you switch and compare what benefits you’re likely to get from a digital bank versus a traditional bank.