App Based Digital Banking in the UK: The Future of Money Management

Banking is no longer something we do on weekday mornings in a high street branch—it’s something we now manage from our smartphones. From instant notifications to bill-splitting and budgeting tools, app-based banking has become the default choice for millions of Brits.

But what is app-based banking, which providers are best, and what should you consider before making the switch?

This guide covers everything UK consumers need to know in 2025 about mobile-first banks and how they compare to traditional institutions.

What Is App-Based Banking?

App-based banking refers to banks that operate primarily or entirely via a mobile app, with no need to visit a physical branch. These banks offer real-time access to your money and often include smart tools like:

• Spending analytics

• Savings pots or vaults

• Instant payment notifications

• Budgeting features

• Bill-splitting and peer-to-peer transfers

Most app-based banks are regulated by the Financial Conduct Authority (FCA) and protected by the Financial Services Compensation Scheme (FSCS)—just like traditional banks.

Why Are People Switching to App-Based Banks?

The shift to digital-first banking has accelerated due to:

• Convenience – manage everything from your phone

• Faster support – live chat or in-app messaging

• Better visibility – instant balance updates and spending insights

• Lower fees – particularly for travel and international payments

• Easy account opening – sign up in minutes with a selfie and ID

For younger users and tech-savvy savers, high street branches feel outdated—many are now closing or reducing hours. App-based banks fill the gap by putting everything in your pocket.

Top App-Based Banks in the UK (2025)

Below is a comparison of the best app-based banks currently available in the UK, highlighting their unique features and who they’re ideal for.

Note: FSCS protection means your money is protected up to £85,000 if the bank fails.

Best Overall App-Based Bank: Monzo

Why we like it:
Monzo is one of the UK’s original mobile-first banks and remains a favourite for its slick budgeting features, transparency, and real-time updates.

Highlights:

• Instant spending alerts

• “Pots” for saving and bill management

• Salary paid a day early

• Overdraft and loan options

• Fee-free UK transfers

• Optional Monzo Plus and Premium plans

Best for: Everyday users who want better control of their money.

👉 Monzo – UK Mobile Bank

Best for International Spending: Starling Bank

Why we like it:
Starling offers fee-free international card use and strong tools for freelancers and sole traders.

Highlights:

• No fees for card use abroad

• 24/7 in-app customer support

• Business account options

• Round-up savings feature

• No monthly fee

Best for: Travellers and business users who want reliability and flexibility.

Best for Cashback and Savings: Chase UK

Why we like it:
Chase brings serious rewards to the UK market with 1% cashback on spending and high-interest savings.

Highlights:

• 1% cashback on card purchases for 12 months

• 5.1% AER on easy-access savings

• No fees abroad

• Instant app-based support

• Free account, no minimum income

Best for: Shoppers and savers who want tangible rewards.

Are App-Based Banks Safe?

Yes, if they are:

• Authorised by the FCA

• Covered by the FSCS (e.g., Starling, Monzo, Chase)

Always check for:

• FCA registration number (available on the provider’s website)

• FSCS status – avoid storing large balances in e-money-only institutions (e.g., Revolut or Monese)

Despite not having branches, these banks often have faster fraud protection, freeze card features, and instant alerts to catch suspicious activity.

What About Customer Support?

While app-based banks don’t have branches, many offer:

• Live chat 24/7

• In-app messaging or email support

• AI chatbots for instant queries

Ratings from users often place Monzo and Starling above traditional banks when it comes to issue resolution speed and helpfulness.

Can You Use These Accounts Like Traditional Bank Accounts?

Absolutely. Most offer:

• Direct debits and standing orders

• Salary payments and BACS

• Faster Payments and CHAPS

• Overdrafts (Monzo, Starling)

• Joint accounts (Monzo, Starling)

• FSCS protection (excluding Revolut and Monese)

You can also use their debit cards for cash withdrawals, contactless payments, Apple/Google Pay, and more.

What If You Need a Loan or Mortgage?

App-based banks are expanding their services. You can now get:

• Personal loans via Monzo and Starling

• Credit builder tools (e.g., Monzo Flex, Revolut Credit Builder)

• Overdrafts with fair daily rates

• Some digital banks now offer savings accounts linked to ISA products (e.g., via Raisin on Starling)

For mortgages, traditional banks still dominate, but expect digital-first options to emerge in coming years.

Can UK Banks Integrate With App-Based Tools?

Yes. Many people now keep their salary and savings with a traditional bank like Barclays, Lloyds, or Halifax, but use Monzo or Starling for day-to-day spending.

These traditional banks now offer their own digital enhancements:

• Barclays: SmartSpend tool and custom alerts

• NatWest: Spending analysis and Savings Goals

• HSBC: “Connected Money” for multi-bank tracking

• Lloyds: Mobile card controls and budget tracker

However, these often lack the speed, design, and flexibility of dedicated digital banks.

Are There Downsides to App-Based Banking?

• No physical branches (may matter for cash-heavy users)

• Less suitable for complex needs (e.g., large cash deposits, mortgage advice)

• Non-FSCS providers (e.g., Monese, Revolut) carry more risk for savings

• Some app features are behind paywalls (Monzo Plus, Revolut Premium)

For most users, though, the benefits outweigh the limitations.

Final Thoughts: Should You Switch to App-Based Banking?

If you want:

• Real-time control of your spending

• Seamless digital experience

• Travel-friendly perks

• Budgeting features built into your bank

…then app-based banking is absolutely worth exploring.

You don’t have to ditch your high street account—many users run both. But with banks like Monzo, Starling, and Chase offering free accounts, it’s never been easier to try mobile-first banking risk-free.

Useful Resources

• Monzo – UK Mobile Bank

• Starling Bank

• Chase UK

• Financial Services Compensation Scheme (FSCS)