Press release

2019 marks the tipping point for digital challenger banks

18 september 2019

  • The 2019 State of Pay report from Vocalink, a Mastercard company, reveals steady rise in popularity of digital-only fintech banks
  • More than one in ten new bank accounts opened are with digital banks such as Monzo or Starling
  • Around one in three respondents (30%) aged 25-44 are considering opening an account with a digital-only fintech bank

Digital-only fintech banks are growing in popularity, with a notable proportion using them as their main current account, according to the new State of pay report from Vocalink, a Mastercard company.

The biennial report reveals that competition in banking may be beginning to increase with digital fintech banks – such as Monzo and Starling – accounting for over one in ten (13%) new bank accounts opened in the last six months. A quarter (24%) of these are being opened to be used as main current accounts, while the remainder are being used as a secondary account. 

Many respondents in our survey hold multiple current accounts to manage their money - four in ten (40%) of these hold a secondary current account, increasing to nearly half (48%) among respondents aged 25-34. Of these secondary current accounts, 3% are with digital banks (such as Monzo or Starling) although this doubles for the 16-34 age group (6%) and increases to 8% among respondents in London.  

While the mainstream banks are clearly still retaining the vast majority of their customers, the State of Pay report suggests the influx of new banks in recent years may be starting to have an impact. The research also shows there has been a 5% drop in new accounts among the ‘big banks’ in 2019 compared to 2018.  

When looking at the typical customer of a digital-only fintech bank, the average age is slightly younger (31 years vs 48 years) and they are more likely to live in an urban area (66% vs 56%). They are also over twice as likely to use mobile payments (68% vs 30%) and tend to have a higher household income (£46k vs £33k).

The report reveals two main factors that may be behind the increasing popularity of the new digital banks: improved functionality of digital banks’ apps and being able to use the card abroad for free. These factors may particularly appeal to the younger generations - indeed nearly a third (30%) of respondents aged 25-44 are considering opening a digital-only account. However, it’s not solely younger respondents using them – one in twenty (6%) respondents aged 55-64 also have an account with a digital fintech bank.

Gregor Dobbie, CEO of Vocalink (a Mastercard company) comments: “After years of discussion around increasing competition in the banking sector, our latest State of Pay report suggests this is finally coming to fruition. While at present the rise in digital-only banks might be most common in urban areas and among younger generations, we expect to see this trend occurring more widely among other demographics in years to come. Many are choosing digital-only banks for the improved technology and lack of charges abroad, and it will be interesting to see how the traditional players respond to these new customer expectations.”  

For further information and to download a copy of the full report, please visit



This 2019 study was commissioned by Vocalink, a Mastercard company, and was conducted by Ipsos MORI, a market research company.

The first stage of the research was a quantitative survey conducted online.

We sampled the views of 2002 UK adults aged between 16 and 75. The qualifying threshold for this audience was ownership of a current account and regular use of a mobile phone. Quotas were set during fieldwork to ensure the sample was representative of the UK population. And data was weighted post-fieldwork to be representative of the UK population by age, gender, social grade and geography. UK adults aged 16 to 75 were recruited via the I-Say online panel.

In addition, we spoke to 301 UK adults aged 76 and over. The qualifying threshold for this audience was ownership of a current account and regular use of a mobile phone. Quotas were set to during fieldwork to ensure the sample was representative of the UK population by geography. UK adults aged 76 and over were recruited via the I-Say online panel.

We also spoke to 300 users of banking or payment services in a microbusiness (with 0 to 9 employees) operating in the UK. Microbusiness users of banking services were recruited via the Dynata online panel.

All quantitative fieldwork was completed between 25 July and 5 August 2019.

The second stage of the research consisted of four focus groups in total, in Leeds (13 August 2019), London (14 August 2019), Bristol (15 August 2019) and Edinburgh (20 August 2019). Participants for the focus groups were recruited according to their attitude to different forms of payment.

Qualitative research is designed to be illustrative, detailed and exploratory. Please note that qualitative findings are not statistically representative of UK adults as a whole and are intended to provide insight into perceptions, feelings and behaviours of this audience.

Additional data has been sourced through Ipsos MORI’s Financial Research Survey (FRS). The FRS is a continuous survey among GB consumers and their financial holdings. 60,000 interviews are completed per annum with 58% conducted online and 42% face to face to be nationally representative of the GB population.

This is the fourth in a biannual series of reports on the state of pay in the UK since 2013. Previous reports were released in 2013, 2015 and 2017.


Ellie Lewis
Director, External Communications

Emma Harvey, Robyn Margetts
Seven Consultancy

About Vocalink  

A Mastercard company, Vocalink designs, builds and operates industry-leading bank account-based payment systems. Our technologies power the UK’s real-time payments, settlements and direct debit systems, as well as the UK’s network of nearly 60,000 ATMs. In 2018, we processed over 90 percent of salaries, more than 70 percent of household bills and almost all state benefits in the UK. 

For payments news and insights from Vocalink, visit