2 in 3 UK business leaders are planning to ditch traditional banking
A survey of 500 UK business owners and decision-makers reveals a continued shift in attitudes towards business banking in 2025, with digital-first providers now firmly in the mainstream. This is the second annual Business Banking Survey from NerdWallet UK.
The full report includes additional breakdowns by age, business size, and top features businesses want from their bank in 2025. https://www.nerdwallet.com/uk/business-bank-accounts/business-banking-why-uk-firms-are-going-digital/ Some key findings are below…
2025 Findings:
70% of UK business leaders would now consider a business bank account with no physical branches, up from 66% in 2024
43% say digital banks are more convenient, nearly double last year’s 22%
Almost half (45%) trust online-only and traditional banks equally, plus over a fifth (21%) say that they actually trust digital banking more
Trust in traditional banks is slowly declining: just 30% still prefer them over digital challengers, down from 32% in 2024
Nearly one-third (31%) believe online-only banks are just as reputable as big high street names, a steep rise, more than tripling from 8% in 2024
What’s Driving this Shift?
Convenience is the biggest factor:
43% admit the convenience and ease of digital banking as the top reason for switching
36% want consistency by using digital providers for both personal and business finances
33% feel digital banks better understand modern customer and small business needs
33% also point to better pricing structures compared to legacy institutions. This figure has more than doubled since last year (14%)
Frustrations with traditional banks are also fuelling the trend. Business leaders listed outdated and slow adoption of digital tools (27%), high or unclear fees (31%), and poor digital experiences (25%) as key pain points. A quarter (25%) also said traditional banks are more profit-driven than customer-focused, eroding trust further.
Interestingly, while less than a third (29%) said they needed access to a physical branch, 35% still valued human contact with an adviser. This highlights that going ‘digital-first doesn’t mean customers will be happy with a lack of personal service.
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.”