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New research by NerdWallet UK, based on a survey of 500 business owners, points to a continued shift toward digital-first banking. But some friction points remain.
Business owners are increasingly embracing the convenience and affordability of online-only banks, but traditional banks are still more trusted.
So, how have attitudes towards business banking shifted since last year’s survey? Let’s take a look.
Key Findings
- 70% of business leaders would consider a business bank account with no physical branches – up from 66% in 2024.
- 43% of business leaders say digital banks are more convenient, nearly double last year’s 22%.
- The top reasons for choosing an online business bank include: the convenience of digital banking (43%), digital banks having a better understanding of small business needs (33%) and a more suitable pricing structure (33%).
- While nearly a third of business leaders (30%) trust traditional banks more than their online-only competitors, the challengers are slowly making inroads, as this trust is down from 32% in 2024.
- Nearly half (45%) of UK business leaders trust online-only and traditional banks equally.
Faceless banking gains ground
Last year, we reported a strong trend toward ‘faceless’ banking. In 2025, that trend has become clearer, with 70% of respondents saying they would consider an online-only bank for their business. This is a sharp rise from 2024, when only 45% had opened an online-only account and just 21% were considering it.
Convenience is a key driver: 43% of respondents in 2025 said they find digital banking easier, almost double the proportion of business leaders (22%) who felt that way in 2024.
Business owners are growing more confident in the reputation of online providers like Monzo, Revolut, ANNA Money and Tide when it comes to choosing a business bank account. Almost a third (31%) of business leaders now consider the so-called challenger banks to be just as reputable as high-street stalwarts such as Lloyds, Barclays and HSBC, up from 8% in 2024.
Why are businesses going digital with their banks?
The reasons behind the shift go beyond convenience. Here are the top ten most common reasons why business leaders would consider an online-only bank:
- 43% of business leaders find digital banking easier and more convenient
- 36% of business leaders already use a digital provider for personal and business banking and want consistency
- 33% felt that digital banks better understand small business needs
- 33% said digital banks offer a pricing structure that better suits their business (up from 28% in 2024).
- 31% now believe digital banks are just as reputable as high street stalwarts.
- 31% said traditional banks charge high or unclear fees
- 27% felt that traditional banks are outdated and slow to adopt modern digital tools.
- 25% of business leaders now see traditional banks as being more profit-driven than customer-focused
- 25% of business leaders say they have lost trust in traditional banks due to poor service, errors, or long wait times.
- 25% said traditional banks have poor mobile or online banking features
These findings point to a growing dissatisfaction with traditional institutions when it comes to business banking. Just outside the top ten, 24% of business leaders said they had been unable to get the support or services they needed outside normal business hours with a traditional bank.
Once online-only banks have captured personal banking customers, they are doing a good job of cross-selling their business offerings. As a result, over a third (36%) of business leaders choose a digital bank for their business because they already use one for their personal finances.
Almost half of business leaders trust online-only and traditional banks equally
Despite the momentum behind challenger banks, 30% of business owners still trust traditional banks more, compared to 21% who place greater trust in online-only providers. That’s roughly in line with 2024, when the figures were 32% vs. 18%.
However, digital banks are quickly closing the credibility gap, with almost half of business leaders (45%) saying they trust online-only and traditional providers equally. With younger generations increasingly digital-first, this trust divide may shrink further over time.
Interestingly, while less than a third of business leaders (29%) wanted access to a physical branch, 35% still prioritised human contact with an adviser, showing that ‘faceless’ doesn’t necessarily mean having no contact at all.
What this means for providers
The demand for low-cost, intuitive business bank accounts remains strong. While trust and brand familiarity keep traditional banks in the game for now, this year’s data suggests digital providers have improved their reputations.
Compared with 2024, more business leaders believe:
- Switching incentives from digital banks are increasingly persuasive, with almost a quarter (24%) of business leaders citing this as a reason why they would consider an online-only account.
- Digital banks understand modern business needs better in 2025 (33%).
- Traditional banks are falling behind digitally. 27% of business leaders see them as outdated in 2025, and 25% say their mobile apps or online banking is poor.
What our Nerds say…
“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.”
Amy Knight, Business Commentator and Spokesperson at NerdWallet UK
Methodology
This survey was conducted online in the UK by OnePoll on behalf of NerdWallet UK between 3rd to 12th June 2025. We asked 500 owners and decision-makers of small to medium-sized businesses (SMEs), aged 18 and older, to answer questions about online-only banking and financial decision-making.
Image source: Getty Images
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