Younger people are the least aware of digital-only banks - less than half (47%) of those aged 18 to 24 have heard of a challenger bank. With Loot specifically targeting students and Monzo having a clear millennial slant, it’s perhaps surprising that fewer young people are aware of these banks.
Of those who are perhaps more likely to explore their banking options, 68% of those aged 35 to 44 and 64% of those aged 25 to 34 are familiar with at least one digital-only bank.
Regionally, those who live in the capital are the most clued up on digital-only banks, with nearly three quarters of Londoners having heard of at least one of them. The next highest area is the North of England, where 62% know of at least one.
With increasing numbers of people becoming aware of digital-only banks and their range of services designed to make banking easier and more transparent, traditional banks are playing catch-up to replicate their offerings.
For example, last year HSBC relaunched its mobile app with a brand new design, showing information on all accounts – even those offered by its competitors – and with an emphasis on providing spending insights.
The other established high street banks either have or are developing their own apps in a bid to remain relevant and competitive.
Sally Francis-Miles, money expert at MoneySuperMarket, said: “Switching banks or opening a new account is perceived as a hassle, so the general public might be reluctant to open digital-only accounts.
“While this means traditional banks are still dominant with consumers for now, digital-only banks are constantly asking what features they can add, how they can push and innovate their products and services. I think we’ll see traditional banks standing up and taking notice, attempting to replicate some of the successes of the digital-only banks”.
Although some Brits may be apprehensive about leaving the high street banks and going digital, over three-quarters of Brits say they’d be comfortable choosing a digital-only bank for at least one financial product.