Yes — digital banks such as Monzo, Starling, and Chase are fully licensed by the Financial Conduct Authority (FCA) and regulated by the Prudential Regulation Authority (PRA). All deposits up to £120,000 per customer are protected by the Financial Services Compensation Scheme (FSCS).

They also employ strong encryption, biometric login, instant card-freezing, and real-time alerts for every transaction — giving users transparency and control that often exceeds traditional banks.

Most digital banks offer competitive interest rates on savings. Monzo offers up to 4.6% AER on savings pots, Starling provides up to 3.25% on its personal current account, and Chase offers 4.1% on its saver account.

Because these banks are mobile-only with lower overhead costs, they can often pass savings directly to customers as better rates and fewer fees.

Digital banks excel for international travel. Most use Mastercard's real exchange rates with no hidden fees. Monzo and Chase allow free card spending abroad, while Starling includes free ATM withdrawals worldwide with fair usage limits.

Revolut stands out for multi-currency accounts, allowing you to hold and exchange multiple currencies at interbank rates.

Every UK digital bank offering current accounts must hold a full banking licence from the FCA and PRA. This ensures they follow the same strict regulations as high-street banks, including capital reserves, data protection, and customer safeguarding.

Some fintech apps operate as e-money institutions rather than full banks — always check for FSCS protection if safeguarding deposits is important to you.

Digital banks generate revenue through interchange fees (small percentages of card transactions), overdraft and loan interest, premium account subscriptions, and partnerships with savings and investment providers.

Their technology-first approach allows lower operational costs compared to traditional banks with physical branches.

If a fully licensed bank fails, the FSCS automatically refunds your eligible deposits (up to £120,000) within seven working days. This protection applies identically to both digital and traditional banks.

Joint accounts are protected up to £240,000 (£120,000 per account holder).

Your ideal digital bank depends on your financial habits and goals. Monzo excels at budgeting with spending analytics and pots, Starling offers excellent travel features and business accounts, Chase provides competitive cashback and savings rates, while Revolut leads in multi-currency functionality.

Consider your primary needs: everyday spending, savings growth, international travel, or business banking.