The UK Digital-Only Banks Report

How Incumbents Can Capture Digital Banking Users amid Tearaway Neobank Growth

Report by Maria Elm  | Dec 14, 2021
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Table of Contents
Executive Summary
Key Points
Introduction
The Rise of UK Neobanks
Top Neobanks Under the Microscope
How Neobanks’ Fight for Profit Is Shaking Up the Industry
Potential Disruptors for UK Banks
How Incumbents Can Fight Back
Read Next
Sources
Media Gallery
About This Report
This report explores what’s driving UK neobanks’ growth and how incumbents can defend their share of the digital bank account holder market.
Topics
Banking
United Kingdom
Table of Contents
Executive Summary
Key Points
Introduction
The Rise of UK Neobanks
Top Neobanks Under the Microscope
How Neobanks’ Fight for Profit Is Shaking Up the Industry
Potential Disruptors for UK Banks
How Incumbents Can Fight Back
Read Next
Sources
Media Gallery

Executive Summary

UK digital-only banks—particularly neobanks—have broken into the mainstream, but not into steady profits. Under pressure from investors, neobanks are trying a range of strategies to diversify their revenue streams. Whether they can pull it off remains to be seen, so incumbents should seize this moment of flux to secure a bigger share of UK digital account holders.

3 KEY QUESTIONS THIS REPORT WILL ANSWER

  • What are the strengths, weaknesses, and long-term risks for the most developed UK neobanks?
  • Which major disruptors could rattle the UK consumer banking market?
  • How can UK incumbents counter the neobank threat?

WHAT’S IN THIS REPORT? This report delves into the largest UK neobanks’ growth and what’s fueling their rise, explores the challenges they face as the market evolves, and presents actionable steps that incumbents can take to strike back and win over digital account holders.

UK Digital-Only Bank Account Holders and Penetration, 2021-2025 (millions, % of population, and % of digital banking users)
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KEY STAT: By 2025, the UK’s cohort of digital-only banks—predominantly neobanks—will have captured more than half of the UK’s digital banking users, and almost 40% of adults overall.

Here’s what’s in the full report

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13charts

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Table of Contents

  1. Executive Summary
  2. Key Points
  3. Introduction
  4. The Rise of UK Neobanks
  1. Top Neobanks Under the Microscope
  2. How Neobanks’ Fight for Profit Is Shaking Up the Industry
  3. Potential Disruptors for UK Banks
  4. How Incumbents Can Fight Back
  1. Read Next
  2. Sources
  3. Media Gallery

Charts in This Report

UK Digital-Only Bank Account Holders and Penetration, 2021-2025 (millions, % of population, and % of digital banking users)UK Digital-Only Bank Account Holders, by Company, May 2021 (millions)
UK Digital-Only Bank Account Holder Penetration, by Age, May 2021 (% of population)UK Digital-Only Bank Account Holder Penetration, by Company, May 2021 (% of population)
UK Digital-Only vs. Traditional Bank Account Openings, 2021-2025 (millions)Leading Reasons to Open a Neobank Account According to UK Mobile Banking Users, July 2021 (% of respondents)
UK Monzo Bank Account Holders and Penetration, 2021-2025 (millions, % of population, and % of digital banking users)Personal Account Providers that Adults in Great Britain Would Recommend to Their Friends and Family Based on Overall Service Quality, July 2019-June 2020 (% of respondents)
UK Revolut Bank Account Holders and Penetration, 2021-2025 (millions, % of population, and % of digital banking users)UK Starling Bank Account Holders and Penetration, 2021-2025 (millions, % of population, and % of digital banking users)
UK Monese Bank Account Holders and Penetration, 2021-2025 (millions, % of population, and % of digital banking users)UK Tandem Bank Account Holders and Penetration, 2021-2025 (millions, % of population, and % of digital banking users)
Leading Personal Concerns of Gen Z* Adults Worldwide, Feb 2021 (% of respondents)

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authors

Maria Elm

Contributors

Tyler Brown
Senior Analyst
Oscar Bruce Jr.
Senior Forecasting Analyst
Cindy Liu
Senior Forecasting Analyst
Daniel Ramirez
Researcher, Financial Services
Daniel Van Dyke
VP, Content