Which banks are purely digital? 

What is a purely digital bank? It’s a bank that has no physical high street branches, all of the banking is managed entirely online and through app-based platforms that you can view on a mobile or tablet. They are paperless, and transactions take place online, which results in several benefits for consumers. 

Digital-only banks are different from those banks that offer online banking apps in addition to their high street branch banking facilities. One of the advantages of digital-only banks is the reduction of overheads with no physical branches to support, which is an ongoing issue for those banks offering both options since they still have those overheads.

The advantages of purely digital banks

Purely digital banking offers a level of transparency to your banking, allowing you to monitor your transactions carefully. These ‘challenger’ banks can offer 24/7 support which is often achieved through online chat arrangements rather than telephone support. You can instantly freeze or unfreeze spending, either for your budgeting control or in the event that your card is lost or stolen. 

Digital banks vary as to the services they offer. Still, there are often facilities to be able to order spending and saving reports, free-spending abroad, money-saving pots to help you plan your monthly budgets, instant spend notifications and bill-splitting.

Concerns relating to purely digital banks

There may be some concerns over security with digital-only banks, in regards to their safety and their vulnerability to fraud, for example. Also, the worry as to what happens to your money if the bank fails. Most digital-only banks use the latest technology to keep the account secure, using face, voice or fingerprint recognition (or a combination of these) and most have a thorough sign-up process that involves having two methods of authentication. 

If you are considering a digital-only bank, it’s a good idea to check that they are Financial Conduct Authority (FCA) approved and protected by the Financial Services Compensation Scheme (FSCS), which protects the first £85,000 of your funds.

Purely digital banks

Monese

Located in the UK, Monese offers anyone resident in the UK or Europe the ability to open an account for free from your phone within a few minutes without the restrictions or hidden fees associated with some banks. There are no credit checks or proof of address required. It can be used in 20 countries and supports 11 languages. It uses two currencies, GBP and Euro and offers discounted foreign exchange fees on overseas spending and transfers.

N26

Based in Germany, N26 offers a current account. The account offers a debit card, digital money transfers, daily spend limits, cash withdrawals from ATMs, immediate lock or unlock of the card if it is lost or stolen and the ability to change the PIN and switch online or overseas payments on or off.

Starling

Based in the UK, Starling Bank offers business and personal accounts and also a teen account. It won Best British Bank and Best Current Account 2019 at The British Bank Awards. It offers a fast application process for which you’ll just need your passport, and no monthly fees and no fees when you spend money abroad. Using the ‘Pulse’ instant update notifications, you can easily see instant payment and spend transactions. It uses Biometric security measures and you’ll be asked to send in a short video of yourself for video identification.

Monzo

Based in the UK, Monzo offers updates on spending transactions with a real-time breakdown of spending habits, quick money transfers and this bank also integrates with other apps, providing a financial hub for its users. Monzo offers money-saving features such as energy swapping, finding the best tariff and letting you switch providers easily.

Atom 

Atom bank offers a choice of savings accounts from 3 months to 5 years with competitive rates and a quick and easy set-up. It offers mortgages and business loans. It has good security features, using biometrics and dispenses with passwords. You’ll need to register voice and face biometrics when you register. There is a six-digit passcode too so you can choose the combinations of security logins that you prefer.

Curve

Curve lets you store all your cards on one app and gives you real-time alerts for your transactions. Everything you buy gets a colour category on your timeline, helping you to track and monitor your spending habits. You can also earn points on different brand names when you use your Curve card, and you can see how many points you have earned and decide whether to spend them or save them.

Important considerations

If you are considering using a digital-only bank, it’s worth deciding whether you want this to be your only bank or whether you prefer to use it alongside another traditional bank account. Particularly if there are areas in which you prefer a face to face transaction. If you’re considering opening a digital business bank account or changing to one, it’s essential to look at the features it offers and work out what you need the account for and which features are the most important for you. 

You might prefer to use a digital-only bank for all of your transactions; many offer just the same services as a traditional bank. You can have a card with an account number and sort code details so that you can spend and request money in the same way as a traditional bank. You can have your salary paid in and set up standing orders, with the benefit of extra transparency to see when real-time transactions are made. 

Alternatively, you may prefer to use it alongside a traditional account and transfer money between the accounts to help you track budgets, savings and spending habits. As digital-only banks are relatively new, you can expect to see the range of services and benefits grow as they become more established.

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