UK neobanks
have surpassed traditional banks in mobile app downloads for the first time,
with digital challengers reaching 71.78 million Android users compared to
legacy banks’ 71.58 million, according to new data from SplitMetrics.

The digital
banking surge has been particularly pronounced in 2024, with neobanks adding
18.6 million users compared to traditional banks’ 7.5 million.

UK Neobanks Surpass Legacy
Rivals for First Time

Revolut has
emerged as the clear leader among digital challengers, accumulating 15.6
million downloads in 2024. Monzo followed with 1.8 million downloads, while
Starling Bank secured 463,000 new users. Traditional banks showed more modest
growth, with Lloyds leading at 1.2 million new downloads, followed by Barclays
with 1.1 million.

It often
comes down to innovation. Monzo, for instance, became the first bank in the UK
to offer customers Apple
Pay monthly payments. The company recently secured additional funding from
Google, increasing
its valuation to $5 billion.

“Fintech
is no longer a challenger but a dominant force in the industry,” said
Thomas Kriebernegg, General Manager at SplitMetrics. “Will this growth
continue into 2025 and beyond? Time will tell, but the work is not over for
fintech apps – the hard work of retaining those hard-earned new users begins
now.”

Revolut
also has ambitious plans for 2025, including
smart ATMs, AI-powered banking, and mortgages, positioning itself ahead of
more traditional competitors in terms of product offerings.

The broader
fintech
sector has also demonstrated visible growth. Trading apps reached a new
milestone with 11 million new Android users globally in 2024, surpassing the
previous record set in 2022. Trade Republic led the trading segment with 2.2
million new users, followed by eToro with 2 million.

In the
money management category, UK-based apps attracted 1.1 million new Android
users, with Plum and Moneybox leading the pack. The cryptocurrency sector
showed resilience, recording 5.6 million Android downloads, with Luno and Nexo
emerging as the top performers among European crypto apps.

Neobanks Gain Attention

The data
suggests a current transformation in how UK consumers interact with financial
services, as digital-first solutions continue to gain mainstream acceptance.
This shift poses both challenges and opportunities for traditional banks as
they compete with more agile, technology-driven competitors in an increasingly
digital banking landscape.

For
example, In 2024, neobanking transaction values are
expected to exceed $6.37 trillion, outpacing the GDP of Japan, the world’s
third-largest economy. Moreover, in the first half of this year, fintech
investments in the UK soared to over $7 billion, increasing from just $2.5
billion a year earlier.

“We are
expecting to see growing investment interest in AI and its use in the fintech
and regtech space,” Hannah Dobson, Partner and UK Head of Fintech at KPMG UK,
said. “Regulation remains a key focus in the EU, particularly with crypto and
digital asset businesses as they navigate the new EU’s Markets in Crypto Assets
regulation.”

The data
shows UK consumers are rapidly adopting digital banking services, with
traditional banks now facing increased competition from technology-focused
challengers. Legacy institutions must adapt to changing customer preferences in
an increasingly digital market.

This article was written by Damian Chmiel at www.financemagnates.com.

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