UK banking is rapidly moving to digital. Future success will depend on speed, seamless customer experiences, and inclusive access for all.
A few things caught my eye last week. First, a KPMG report highlighted that the UK’s high-street banks saw profits fall in 2024. The reasons? Customers are moving to alternative lenders and digital-first banks that offer both better savings rates and more intuitive, mobile-led services. Second, a milestone from Monzo. The digital bank has now passed 13 million customers. That’s a vast number, and it says a lot about where people want to do their banking.
These aren’t isolated events. They’re part of a bigger shift that’s been building for years, one that’s now accelerating thanks to technology that can deliver speed, inclusion, convenience, and value at scale. Behind the headlines, it’s the infrastructure powering these digital experiences that will decide who wins the next phase of the UK banking race.
The writing’s been on the wall
I’ve been in and around payments long enough to know that big industry shifts don’t happen overnight. They build slowly, then pick up speed once consumers see the value for themselves.
The latest numbers tell us the shift to digital banking is no longer a prediction; it’s here. Digital banks have set the bar for convenience, speed, and embedded value. And where they lead, the high street banks will need to follow, because the demand is now impossible to ignore.
Figures from last December show 6,214 bank branches have shut since January 2015, around 53 every month. According to UK Finance, in 2018, over a quarter of UK consumers still preferred to pay in cash. By 2025, that’s dropped to just 13%. Mobile wallets and debit cards now dominate, especially for younger customers.
Even more telling from an embedded finance perspective is that 69% of UK consumers say they’d consider banking with a non-bank provider. Just two years ago, that number was half what it is today. PayPal, Google, and even WhatsApp are now seen as viable places to manage your money. That’s a fundamental shift in trust and expectation.
Inclusion has to keep pace
While digital is surging ahead, the FCA’s Financial Lives Survey estimates:
- 3.9 million people in the UK are digitally excluded
- 1.1 million are financially excluded or unbanked
- 3.1 million remain cash-reliant
Inclusion is a market opportunity too. As the Treasury Select Committee highlights, we need to join up the thinking between cash acceptance and digital inclusion to avoid leaving cash users behind, and, as the report warns, creating a two-tier economy.
Digital done well is one of the best tools we have for inclusion, reaching people in rural or underserved areas, offering low-cost accounts, and giving customers real-time tools to manage their money confidently. The challenge is ensuring this progress reaches everyone, not just the digitally savvy.
Where we go from here
For UK banks, the next stage of the digital era will be defined by three things:
- Speed to market: The ability to launch and iterate products quickly, without being held back by legacy systems.
- Seamless customer experience: Meeting customers where they are, whether that’s through embedded finance in retail apps, instant card issuance, or personalised financial insights powered by AI.
- Inclusive access: Ensuring digital services work for all, from urban professionals to customers in low-connectivity or lower-literacy segments, so no opportunity is left untapped.
The same real-time, cloud-first infrastructure that helps a digital bank like Monzo scale to millions of customers, issuing and managing cards instantly, in multiple formats and currencies, can also help a traditional bank bridge the gap in speed, insight, and convenience.
That’s why I see these recent headlines as a reminder that the shift to digital is more than well underway, and that keeping inclusion at the heart of it isn’t just the right thing to do, it’s where the biggest opportunities will be for all of us.
