What is mobile banking and who are the digital challenger banks and are they any good?
With thousands of Brits signing up to this new breed of digital-only banks, we look at what all the fuss is about
ATOM, Monzo, Tandem and Starling. These names might sound unfamiliar to you, but they are part of a new breed of digital-only banks that are growing in popularity with Brits.
Thanks to their attractive products, they are luring in new customers everyday, and are becoming a threat to traditional high street banks.
Because they don't have costly overheads like bank branches and call centres, they are able to pass on savings to customers in the form of market-leading savings rates or fee-free prepayment cards.
Atom, Monzo, Starling and Tandem are all app only and based in the UK.
Importantly, the firms that have banking licences (all but Monzo and Starling, which have restricted licences) are protected by the same Financial Services Compensation Scheme (FSCS) that is offered by more traditional banks.
This means that up to £85,000 of your money is protected should the bank goes bust.
MOST READ IN MONEY
What is a digital only bank?
A digital only or app based bank is exactly what it sounds like, a bank without any physical premises.
These banks are newer and may not offer all of the services of a traditional bank, but most app based banks offer in-app customer support if you need assistance.
As these new banks aren't as full featured as a traditional bank they quite often focus on having high tech and well designed systems to help you save money. Getting immediate notifications of money going in and out of your account is a fairly standard feature.
Atom Bank... the best for savings
Durham-based Atom was the UK's first app-only bank when it launched in April 2017, and it has been hugely popular with savers ever since thanks to its market-leading deals.
A spokesperson for the bank, which currently only offers savings accounts and small business loans, said it signed up over 17,000 new customers since it's launch and raised over £107 million in funding.
The bank currently offers the best rates on fixed-rate bonds, paying a market-leading 1.8 per cent for one-year, 2 per cent for two years, 2.15 per cent for three years and 2.28 per cent for five years.
It hopes to launch a full suite of banking products this year, including current accounts, debit cards and instant access savings, all of which will be managed via the app.
Monzo bank... the best for transparency
Monzo was founded in 2015 and gained a full unrestricted banking licence in 2017.
As a authorised unrestricted bank Monzo can offer their app users the chance to upgrade to a full current account.
App users are consulted by Monzo whenever the company want's to change the app.
Customers then get to vote on how the app should change and also suggest ideas for the company to enact in the future.
Monzo previously offered a prepaid Mastercard as part of beta testing the app but that has now ended.
If you still have money on the prepaid card that money will now be transferred to your original bank card.
Customers can manage their finances with the app, with real-time updates showing the user how much they are spending and on what.
Starling bank... the best for money management
Starling got its restricted banking licence last year, but it has only just started accepting new customers for the beta version of its mobile banking app.
A small group of testers close to the brand were able to try out its contactless cards last year, but now iOS users will be able to use, test and feed back on the features of the Starling current account via the app.
This will include opening the account, making payments and setting up regular payments.
The app also gives users real-time notifications on where their money is going, to help people manage their money better.
It offers other handy functions including if you lose your card but you think you know where it is, you can turn it off using your app until you find it again.
Tandem...the best for product comparisons
Tandem lost its banking licence last year after failing to secure funding, but it is back up and running and now offers a savings account.
While it won't be able to offer a wide range of banking services, a spokesperson for the bank told The Sun Online that it will launch a credit card for users later in the year.
Customers will be able to link existing accounts such as credit cards, current accounts and savings products to the app, which will then check your finances for better products across the market including credit cards, savings and energy.
We pay for your stories! Do you have a story for The Sun Online Money team? Email us at [email protected] or call 0207 78 24516