I first heard about app-only banks when my friend showed me her Monzo app. I was pretty dubious about the digital-first challenger banks coming to the market, particularly when it comes to security and lack of face-to-face support. Since then my views have turned 180 degrees. It’s amazed me how app-only banks have quickly dominated the finance world. Consumers can manage their bank accounts digitally without having to visit a branch. All you need to do is submit personal details and ID proof via the app, and you’re all set!

It’s a big disrupter with a lot of potentials to make finances easier and accessible to customers.

App-only banks are becoming more popular with millennials and Gen-Zers. In a Censuswide study, where they interviewed 2,000 adults with a bank account, 83% said they would open a new account if certain features would entice them. A third of respondents would be attracted to a bank that gives them a prediction of whether they were on course to run out of money before their next payday. Their disruption to the market isn’t a surprise, considering the appetite millennials and Gen-Zers have for digitising their finances.

Here’s a roundup of the best app-only banks:

Starling Bank – best for opening a current account

• Voted Best British Bank and Best Current Account 2020
• Offers personal, joint and business accounts
• Real-time notifications on your phone as you spend
• Savings goals to set and monitor
• Round up transactions to the nearest pound and the spare change is automatically put into your savings
• No fees for spending abroad
• Customer service available 24/7
• Compatible with Apple Pay, Google Pay, Samsung Pay, Fitbit Pay, Garmin Pay
• Available in the UK only
• Your money is protected by the Financial Services Compensation Scheme (FSCS), protected up to £85,000

Monzo – best for budgeting

• Real-time notifications on your phone as you spend
• Offers personal, joint and business accounts
• Set spending budgets with the app along with a summary of your spending
• The card is accepted worldwide
• Savings ‘Pots’ available that set money aside (by rounding up every purchase you make)
• ‘Bill Tracker’ feature
• ‘Get Paid Early’ salary advance feature
• Compatible with Apple pay, Samsung Pay, Google Pay
• Available in the UK, but as stated on Monzo’s help page, you can open a Monzo account even if you’re not a UK tax resident. All you need is a UK address. If you don’t have a UK address, a Monzo account cannot be offered to you. If you’re in the US, you can join the waitlist here.
• Your money is protected by the Financial Services Compensation Scheme (FSCS), protected up to £85,000

Revolut – best for spending money abroad

• Hold and exchange up to 26 currencies in the app
• Spend on the Revolut card in 120 currencies
• Real-time notifications
• Analytics to track spending habits
• Round up transactions to the nearest pound and the spare change is automatically put into your savings
• Spend and send money abroad with no fees
• Withdraw cash abroad fee-free
• Use the app to buy and exchange cryptocurrency (premium feature)
• As stated on their website, the app is available in the European Economic Area (EEA), Australia, Canada, Singapore, Switzerland, Japan and the United States
• Authorised by the Financial Conduct Authority (FCA), but not FSCS protected

Atom Bank – best for savings, loans and mortgages 

• Offers savings accounts, mortgages and business loans (doesn’t offer current accounts)
• Offers competitive savings rates
• Mortgages are available through its broker service, accessible via the app
• Customer service available 24/7
• Uses face and voice recognition
• Lets you personalise – you can name your bank, create a logo and choose your colour scheme.
• Available in the UK only
• Your money is protected by the Financial Services Compensation Scheme (FSCS), protected up to £85,000

Monese – best for using worldwide and for international students

• You do not need a proof of address to open an account
• Real-time notifications on your phone as you spend
• Accepted worldwide
• Transfer money abroad into 14 currencies
• Track spending habits
• Specialises in current accounts
• Provides real-time insight into your available balance
• Available in the European Economic Area (EEA)
• Your money is safeguarded under the EU Electronic Money Directive 2009/110/EC and UK Electronic Money Regulations 2011 but is not FSCS protected

I decided to open an app-only bank account and I found the experience so quick and easy! Creating an account didn’t feel overwhelming compared to opening up with a traditional bank, the whole process was efficient. After supplying the required information and reading the T&Cs, I was all set. All within 5 minutes! Once I was set up, I was able to see the options available at my fingertips: setting up notifications, saving money, accessing support, how I can track my spending and more.

Is opening up an app-only bank right for you? Check out our pros and cons list:

Pros

• Don’t need to fill in paperwork to open up an account
• Everything can be managed on your smartphone
• Can provide a convenient and quick service for customers through the app
• Easy savings options are available
• Free transactions abroad
• Lower fees
• Real-time notifications
• Ability to freeze your card if lost or stolen

Cons

• Relies on an internet connection
• Can’t visit a branch
• Do not offer face-to-face support
• Paying in cash or depositing cheques can be tricky
• Financial products on offer are limited compared to traditional banks e.g. overdrafts and loans

If app-only banks are not available in your country, there’s no doubt they’ll be popping up soon. It’s a big disrupter with a lot of potentials to make finances easier and accessible to customers.

I am completely with you if you have concerns about using an app-only bank. For me, I’m on-board with having an app-only bank, but only with the option of having this alongside my traditional bank account as well. I’m drawn to the innovative features and effortless user experience of app-only banks, however, the products and incentives offered by traditional banks are more wide-ranging compared to app-only banks.

Perhaps soon, app-only banks can provide incentives for customers to switch over to them and leave the traditional bank behind. But for the moment, I’m happy balancing between the two.

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By Rebecca Azad

Editorial Fellow

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