App-based Banks

Ethical buying guide to App-based Banks, from Ethical Consumer

Ethical buying guide to App-based Banks, from Ethical Consumer

This is a product guide from Ethical Consumer, the UK's leading alternative consumer organisation. Since 1989 we've been researching and recording the social and environmental records of companies, and making the results available to you in a simple format.

App-based banks are a new phenomenon whose popularity is growing in the UK, we take a look and see how ethical they really are. 

This guide includes: 

  • Ethical and environmental ratings for 4 app-based banks
  • Best buy recommendations
  • What do they offer? 
  • Company behind the brand: Atom Bank


This product guide is part of the special report: Ethical Money


Customise your scorecard ratings

How important to you?
Click the + icon to expand categories

To save your personal score settings and use them elsewhere around the site, please  Log In.



Score Ratings

Our ratings are live updated scores from our primary research database. They are based on primary and secondary research across 23 categories - 17 negative categories and 6 positive ones (Company Ethos and Product Sustainability). Find out more about our ethical ratings


Score table

The score table shows simple numerical ratings out of 20 for each product. The higher the score, the more ethical the company.

Move the sliders to customise these scores. 

Click on a product name to see the stories behind the score (subscribers only). 


Full Scorecard

The Full Scorecard shows the 'black marks' for each product, by each of the 17 negative categories. The bigger the mark, the worse the score. So for example a big black circle under 'Worker Rights' shows that the company making this product has been severely criticised for worker abuses.

Scores start at 14.  A small circle means that half a mark is deducted, a large circle means that a full mark is deducted.

Marks are added in the positive categories of Company Ethos and the five Product Sustainability columns (O,F,E,S,A).  A small circle  means that half a mark is added, a large circle means that a full mark is added.

The Full Scorecard is only available to subscribers. Click on the More Detail link at the top of the score table to access it.


Customising Rating Scores

Move the sliders to change the weighting given to each category. You can open up each of the 5 main categories by clicking on the + sign. This way you can compare products according to what's ethically important to YOU.  


Saving Your Customised Weightings

You must be signed-in to save your customisations. The weightings you have given to each category will be saved premanently (subscribers) or only for this visit to the site (registered users).  Once set, they will be used to calculate the scores in all the buyers' guides that you view. 


Stories and Data behind the scores

To see all the stories and research data behind the ratings you'll need to be a subscriber.

You must be signed-in to save your customisations. The weightings you have given to each category will be saved premanently (subscribers) or only for this visit to the site (registered users).  Once set, they will be used to calculate the scores in all the buyers' guides that you view. 


Stories and Data behind the scores

To see all the stories and research data behind the ratings you'll need to be a subscriber.

How the Sliders work
Move the sliders to see how different issues affect the score table
Refine each category by clicking the + icons
Save your settings (you need to be signed in first)
Key to expanded Score table

Best Buys

Best Buys for guides published in the last 6 months are only available if you are signed in. 

Subscribers have access to the most convenient and highly respected ethical information available anywhere - all for just £29.95 a year.
Start your 4 Week Trial subscription today




Last updated: April 2018 






Special Report

Ethical Issues in the Banking Industry.




App-based Banks

In January 2018, it was revealed that online banking had overtaken visiting branches and that the proportion of transactions done in branches had fallen from 48% to 34% since 2016.

Online banking is offered by most banks so that you can access your account on the internet from your laptop or computer through the bank’s website. But, in response to this online trend, there are many companies that are developing banking products which suit the smartphone era.


Image: Monzo


Mostly, these are from mainstream banks but these developments have also spawned new ‘app-based banks’ which offer traditional banking services such as current and saving accounts, mortgages and credit cards. The only difference is that these banks solely exist as an app on your smartphone or tablet.

Some describe these app-based banks as ‘challenger banks’ due to the fact they are seen to be challenging traditional banking structures and services. It is certainly an industry which is seeing rapid growth:



What do they offer?


Firstly, they all offer an app – a programme that runs on your smartphone. Once you have downloaded the app you get access to different services (see table below). 


Table: App-based banks


Secondly, they all offer analysis of your spending and they help people track money spent in real time. The Monzo app, for example, tells you how much money you can spend each month; notifies you when bills increase or are due to be paid; and even helps to reduce your bills by suggesting cheaper alternatives.

Thirdly, they offer transparency. Mostly this is around being clear about how they operate, what they offer and how their product works. Until recently, some of the companies in this market offered customers free overseas cash withdrawals.

However, due to the popularity of this service many of the companies faced high costs per customer. Monzo responded by asking its users how to solve the issue and customers voted to limit the amount withdrawn overseas per month.

Fourthly, it is about community. By getting user feedback on the way the app works, companies can “develop products that consumers want”. Monzo says:

“For too long, banking has been obtuse, complex and opaque. We want to change that and build a bank with everyone, for everyone. Our amazing community of users suggests features, tests the app and gives us constant feedback so we can build something we all love.”



What are the concerns?


The main concern is the protection of your financial information and money.

With regards to the protection of money, three out of the four companies listed in this report have the full £85,000 Financial Services Compensation Scheme (FSCS) protection. This means should anything happen to your bank you are protected up to £85,000.

Revolut does not appear to be protected by the FSCS. Instead money deposited with it is placed into a special ‘ring-fenced’ account at Lloyds Bank. If Revolut was to go bankrupt, money in this ring-fenced account would be protected.

However, if Lloyds collapses, consumer information website Money Saving Expert warns “Your money may NOT be protected. This is because it’s not counted as a deposit, in the way that cash in a savings account would be, and so it’s not as clear cut.”

With regards to the security of your data, they all offer similar security settings to those you get with traditional banking apps such as using passwords or passcodes. Atom also uses biometric security measures (using your voice or face to access your account). Starling and Monzo offer security measures such as Touch ID/Fingerprint scan.



What about ethics?


The advantage of these new banks is they don’t currently come with quite the same long-established ethical issues that are prevalent in the financial sector

Nevertheless, they are all backed by individual investors and venture capitalists who may hold investments across a wide range of other industries. 

No company had any information or policies about the environmental impacts of its operations. In particular it is disappointing that none of the companies mention the use of data centres which require large amounts of energy.

A report in the Guardian in December 2017 stated that “Data centre capacity is rocketing in Europe and Asia with London, Frankfurt, Paris and Amsterdam expected to add nearly 200 MW of consumption in 2017, or the power equivalent of a medium-size power station”. Although this was obviously not just down to the growth in app-based banking, this might be an area that the community of customers might want to ask for further information on.






Company behind the brand


Atom Bank Plc is an app-based bank located in Durham, UK. Founded in 2013 by two previous employees of Metro Bank and First Direct, it launched its first version in April 2016. However, it has put on hold the launch of a current account.12

To date, the company has raised £200 million in capital. Its most significant investor is the Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA) with 29.5%.13 BBVA has links to providing funding to the Dakota Access Pipeline in the USA and the Trans Mountain Pipeline expansion in Canada. Both projects have been criticised for their impacts on the environment, tribal nations and indigenous peoples.14

Want to know more?

If you want to find out detailed information about a company and more about its ethical rating, then click on a brand name in the Score table. 

This information is reserved for subscribers only. Don't miss out, become a subscriber today.


This product guide is part of the special report into ethical money. See what else is in the report.




You must be in Edit Mode to enter content, and then you can use the Module Action Menu or Module Action Buttons to manage content

Navigate To: