Is it time you ditched your High Street bank and went digital?

With a slew of digital-only options, is it time to ditch your old bank? We look at how Monzo, Starling and Revolut are challenging the old guard.

Digital-only banks have become more established in the past few years, with a multitude of options. But is it time to ditch your High Street bank for one of them? In the past decade since the financial crisis a multitude of digital-only banks have emerged as banking customers look for new and innovative ways to handle their finances.

Digital-only financial options are now really varied, and consumer choice has never been better, with plenty to pick from via your smartphone. The range of services from digital-only providers now matches those provided by the high street. However, for the purposes of this article we’re going to focus on current accounts. Big banks such as HSBC, Lloyds and NatWest have come under increasing pressure in recent times from so-called challenger banks in the current accounts market. But what do these challengers actually offer to customers?

Here are some top picks, their best features and drawbacks.


Perhaps the most famous one on this list, Monzo is well-known now for its flashy ‘hot coral’ (read: pink) debit cards.

Monzo offers lots of features including budgeting, spending analytics and ‘pots’ which you can create to help manage and apportion your money. You can even set up bill-specific pots to keep cash aside to pay your monthly bills from. You can set yourself monthly spending limits and make payments really easily within the app. It will also give you summaries of spending areas each month, categorised in sections such as eating out, personal care or groceries. This can be especially helpful if you’re struggling to identify areas where you might be overspending regularly.

Like High Street stalwarts such as Lloyds or NatWest, Monzo is a fully licenced UK bank. As such you get £85,000 deposit protection from the Financial Services Compensation Scheme (FSCS). The account also provides other optional services such as overdrafts and loans. It also has a premium service called Monzo Premium, which costs £15 and will give you phone insurance, worldwide travel insurance, 1.5% interest on balances up to £2,000 and other perks – it even comes with a shiny metal bank card. Check if you’re not already receiving some of these services such as phone protection on your home insurance though, as it may not be worth it.


The other major digital-only bank to choose from is Starling, founded by long-time banker Anne Boden. Boden worked for years at major High Street banking institutions before taking what she’d learned from those places and implementing the best bits into Starling.

Starling has lots of spending analytics, makes payments really easy and has a user-friendly interface for customers who might not be the most tech-savvy. It also has segregated spending pots called ‘spaces’ which can help you manage small savings goals.

One of the standout features on Starling though is zero-cost spending abroad. Starling charges nothing for you to spend abroad, and only changes your money into foreign currency at the interbank rate, meaning you’ll always get the best deal when using your Starling card abroad. It also has the option to add joint accounts for you and your partner, plus euro accounts if you need to keep, send or receive money in euros.

As with Monzo, it is also a fully licenced UK bank offering all the same protections as peers.

Best of the rest

While digital banking apps have proliferated in recent times, most are not really worth considering for one specific reason – they aren’t licenced UK banks and don’t have the same level of deposit protection as Monzo, Starling, or big High Street banks.

There are, however, two names of note in this category: Revolut and Monese.

Revolut has become something of an alternative option. It has many of the features of Monzo and Starling but doesn’t currently have FSCS protection. Rather, money is secured in so-called e-money accounts. The feature that sets Revolut apart is the greater variety of currencies you can maintain balances in. It is, however, an inferior choice if you’re looking for UK-specific current accounts.

Monese gets a mention because it is extremely easy to set up and use. However, like Revolut it doesn’t currently carry any deposit protection.

Whether you decide to drop your old bank or not, there is certainly plenty to choose from now in digital banking. Although the aforementioned apps have done a lot to innovate when it comes to mobile-only banking, many of the bigger banks have now largely caught up in terms of features.

It’s best to consider what you need the account for, and whether it’s suited to you, before moving all your bills and salary into it. Remember though that there’s no limit to how many current accounts you have, so keeping more than one is perfectly possible. Just try not to open them all at once as this may leave an impression on your credit report.