Over 2 in 3 UK Business Leaders Considering Leaving Traditional Banking
Digital-only banks are becoming an increasingly common fixture in the UK’s financial ecosystem, as more businesses turn to providers like Starling and Monzo to manage their accounts without the need for physical branches. This may point to a broader shift in trust, as confidence in traditional banks may be waning following a string of recent cyber attacks, especially those affecting major banking institutions like Barclays and HSBC. To better understand how business leaders are viewing this shift, we worked with NerdWallet UK to survey 500 UK business owners – repeating a similar study from 2024 – to explore their opinions on the rise of online business banking. Amy Knight, small business expert at NerdWallet UK, also provides insights into how UK businesses are embracing digital banking below.
7 in 10 business leaders are considering switching to an online-only bank in 2025
| Business Leaders’ Likelihood to Consider Online-Only Banking (2025) | % of Business Leaders |
| Likely | 70% |
| Neither likely nor unlikely | 10% |
| Unlikely | 15% |
The majority of UK business leaders show openness to online-only banking with providers such as Monzo or Starling, with 70% saying they are likely to consider it. This is up from 66% last year, indicating a further shift to digital services. Only 15% are unlikely or firmly opposed, while 10% remain neutral. Notably, only 6% of business leaders were definitely opposed to online-only banking.
Over two-fifths (43%) of business leaders prefer the ease and convenience of a digital bank
| Top 5 Reasons Business Leaders Prefer Online-Only Banks (2025) | 2025 versus 2024 % |
| I find digital banking easier and more convenient | 43% (up from 22%) |
| I already use a digital bank for personal banking and wanted consistency | 36% (up from 18%) |
| Digital banks better understand small business and modern customer needs | 33% |
| A digital bank has a more suitable pricing structure for my business | 33% (up from 14%) |
| Online-only banks seem just as reputable as traditional banks | 31% |
In 2025, more business leaders are opting for online-only bank accounts, with convenience cited as the top reason. 43% find digital banking easier and more convenient, nearly doubling from 22% in 2024. Stability is also influencing business banking, as 36% now say they want consistency with their personal digital banking, up from 18% last year.
One-third of business leaders (33%) believe that online-only banks have a better understanding of small business and modern customer needs, while nearly the same proportion (31%) view digital banks as just as reputable as traditional banks.
Nearly half of business leaders (45%) place equal trust in digital and traditional banks
| Trust in Online-Only vs. Traditional Banking Among Business Leaders | All ages | 18 to 24 | 25 to 34 | 35 to 44 | 45 to 54 | 55 to 64 | 65 and over |
| Trust both traditional and online banks the same | 45% | 29% | 49% | 33% | 43% | 48% | 60% |
| Trust traditional high street banks more | 30% | 12% | 26% | 33% | 35% | 38% | 24% |
| Trust online or app-based banks more | 21% | 53% | 25% | 28% | 17% | 10% | 8% |
| Neither or not sure | 4% | 6% | 0% | 7% | 5% | 3% | 8% |
Almost half of British business leaders (45%) trust online and high-street banks equally – a slight drop from 46% in 2024. This suggests that overall confidence in both types of providers remains relatively stable.
Although trust has dropped slightly overall for digital banking, younger business leaders are actually gaining trust in online financial services. Last year saw 40% of business leaders aged 18-24 trusting online or app-based banks more than traditional banks; this has risen by 13% in 2025, to 53%.
On these findings, Amy Knight, small business expert at NerdWallet UK, comments on what’s driving the shift to online-only business banking:
“This year’s findings show that online-only banking has reached a tipping point for businesses. Challenger banks are no longer just convenient alternatives – they’re increasingly seen as being more aligned with the needs of British businesses today.
The number of business leaders who say they find digital banking easier has almost doubled in 12 months. If this trend continues, digital providers could be on track to overtake the big-name banks in the next few years.
Many business owners view managing their business finances on a mobile app as imperative. A clunky user experience or long wait times to speak to an advisor will not be tolerated by the next generation of business leaders. This was evident in the data, which highlighted 18 to 24-year-olds as the group most likely to choose a provider based on its app.
As digital providers get slicker and online bank accounts get smarter, traditional banks could be left further behind. Legacy infrastructure, which has proven to be vulnerable to IT disasters, makes it harder for the big-name banks to chase down the new kids on the block.
However, customer service, including access to an advisor, remains a core consideration for business leaders of all ages. This creates an opportunity for traditional banks to stay relevant if they invest in digital innovation and user experience.”