By Kate Steere, Editor and Banking Expert, Finder UK.
The banking battleground has been evolving over the past decade as newer digital-first banks like Monzo and Starling have secured more of a foothold. While they arrived on the scene with great fanfare, there were doubts as to whether they had the staying power to compete against the customer loyalty held by the more traditional banks. However, recent research shows that fintechs in 2025 are winning customers over, not just as a shiny new toy but as a viable banking option.
The top 4 banks in terms of customer satisfaction in the most recent Finder UK Customer Satisfaction Survey were all fintechs. This was mirrored by Ipsos Mori’s Personal Banking Service Quality survey in February 2025, where the top 3 spots were taken by digital-first banks.
Chase, Starling Bank and Monzo are now household names that are consistently achieving when it comes to meeting customers’ expectations. In turn, this has led to 40% of Britons now having a digital-only bank account in 2025, while 1 in 8 intend to open one within the next 5 years. So, why are customers loving fintech more than ever?
Key innovations driving the fintech revolution
In order to compete against banks that have retained customers since childhood and garner high brand loyalty, fintechs have focused on innovation and offers as a way to attract a customer base.
The digital-first approach lends itself to more personalisation and a smoother customer experience. Services such as automatic spending categories, savings pots or spaces, round-up spare change options and bill splitting functionalities appeal to customers who are looking for banks to make managing their money easier.
Fintechs have also acquired customers through exclusive offers and rates. For example, Chase is one of the few banks to have cashback on spending, while up until February 2025, Starling offered a competitive interest rate on current account balances.
Low-fee travel has also been a way for fintechs to attract customers. Many people have opened accounts with digital-first banks purely for the benefit of free transactions abroad. Where some traditional banks charge a foreign transaction fee – typically between 1% and 3% – on card spending abroad, many of the challenger banks allow you to spend for free.
Traditional banks, thriving or struggling?
There are a number of traditional banks and building societies that have reacted to the changing landscape and made some well-timed improvements to their services in order to maintain a good level of customer satisfaction.
Nationwide is one of those. It committed to a much-needed overhaul of its mobile app in 2024 and positioned itself as one of the few financial institutions keen to keep branches open.
Lloyds Bank has also seen a recent influx of customers and is one of the top traditional banks in terms of banking service quality. It’s done this by tapping into offering lifestyle benefits, no fees for spending abroad and exclusive savings rates, following the example set by the fintechs.
Meanwhile, banks like Barclays and Santander have struggled to make inroads on customer satisfaction tables. Branch closures combined with payment and digital banking service issues have exposed weaknesses and led to customers feeling let down.
Who’s winning in 2025?
Traditional banks still maintain a huge customer base, but things are shifting. The products and services offered across fintech and traditional banks are pretty similar, so it’s the customer experience that is becoming the differentiator.
Customer acquisition and retention are increasingly relying on a positive customer experience, be that through an engaging and innovative app or through products and services that tap into customers’ overall financial goals. Whichever bank delivers that, whether it’s a fintech or a traditional bank, will ultimately win out.
