Digitalisation of banking in the UK: statistics for 2025 and beyond

Reliable, up-to-date data on these shifts can be hard to find. Much of what's available lags behind the pace of real change, leaving decision-makers without the insights they need.

At Vention, we work alongside the fintechs and banks shaping this evolution firsthand. Drawing on that fintech experience, we've gathered the latest figures and trends defining banking in 2025 and beyond, with the clarity and context today's decisions demand.

How far has digital banking really come? And what gaps and opportunities are still ahead? Let’s take a closer look.

Domestically, the picture is just as impressive. The Prudential Regulation Authority currently oversees around 1,300 institutions, including banks, building societies, credit unions, insurers, and major investment firms. In 2024, the banking sector employed more than 340,000 people. ^[5][22]

The ecosystem is broad and diverse: 42 building societies and seven credit unions in the UK, serving altogether around 26 million customers in the UK.

As for banks themselves, 362 banks were operating in the UK in 2024, a 6.8% increase on the previous year. Notably, the number of foreign banking establishments is almost twice as high as the number of UK-originated banks, reflecting the UK’s ongoing appeal as a global financial hub. ^[6][7][41]

Of course, technology is not the only driving factor for the shift. The COVID-19 pandemic had its say in the decline of the popularity of branch banking between 2020 and 2021. ^{[12][13][14][15]}

Security concerns also play a role. According to LINK, about 66% of those who favour branch banking cite worries about online security, discomfort with digital tools, or greater confidence in banking face-to-face. Curiously, more than a third say they continue to use branches simply to support their local community. (Very British indeed!) ^[29]

• A third of Brits use mobile banking daily.
• Almost a third of UK adults bank online at least once a week.
• More than a third of Brits hardly ever visit banks in branch. ^[18][19][20]

The takeaway is clear: convenience drives behaviour. While branch banking still has regular customers, banking in the UK has become primarily digital.

Neobanks and challenger banks have rewritten the rules. So, what’s the difference?

• Neobanks are usually fintech companies that offer digital-only bank-like services, like payments or savings management. Neobanks do not have their own banking licence but rather partner with traditional banks to be able to provide regulated banking services to their clients.
• Challenger banks refer to smaller, recently created banks without physical branches but with an official licence. Such banks are entitled to provide a full range of banking services, which makes them strong competitors to traditional banks.

Both groups fall under the broader category of digital-only banks. Together, they have propelled the growth of the sector: by 2024, half of UK consumers had chosen a digital-only provider, up from just 16% in 2018.

However, traditional banks continue to dominate. Around 84% of primary banking relationships are still held by Britain's largest banks, while neobanks account for just 5%. ^[23]

And another 10% are planning to expand AI usage in the next three years. This marks a significant jump from 2022, when only 58% of firms reported using AI to streamline their operations. ^[30]

However, given the sector’s long-standing reliance on traditional workflows and, often, legacy systems, the fact that over half of UK-native banks have adopted AI is a roaring success. ^[30]

While some companies have introduced AI-enabled services, challenges around regulation, data privacy, and security persist. Experts suggest it will be at least another two years before AI becomes a reliable tool in front-line banking operations. ^[30][31]

• HSBC has introduced limits of £2,500 for a single transaction and a total of £10,000 in any rolling 30-day period.
• Santander prohibits payments to Binance.
• Lloyds Bank bans buying cryptocurrency on its credit cards. ^[32][33]

And the resistance is not without reason: against the backdrop of unclear government regulations in the domain, UK banks want to protect their clients from scams and fraud. 

In December 2023, Fnality launched the Sterling Fnality Payment System (£FnPS), marking the world's first fully regulated blockchain-based payment system for central bank money. £FnPS is recognised by HM Treasury as important, and operates under the oversight of the Bank of England and the UK's Payment Systems Regulator. ^[35]

Legislation is another step towards blockchain adoption in the UK. The UK government marked the beginning of 2025 by publishing a draft of legislation for managing crypto assets. The new Plan for Change is supposed to protect people’s assets while leaving sufficient space for innovation in the domain. ^[34]

Having money physically in hand gives consumers more control over their spending and savings. Without the widespread availability of digital budgeting tools and mobile banking apps (particularly among younger generations), the share of cash payments would likely be even higher.

• Contactless debit and credit card payment volumes will exceed 25 billion payments, accounting for 45% of all payments made in the UK.
• Faster Payments and other remote banking will grow to 7.2 billion payments.
• Cash payments account for around 6% of all payment volume, approximately 3.4 billion transactions.

The UK may not become entirely cashless in the near future, but the shift is unmistakable. Cash will continue to serve specific groups, yet it will no longer hold the central role it once had. ^[17]