Best Banks in the UK 2023 - Personal Banking

The International Business Times UK is proud to introduce the Best Banks in the UK 2023 - Personal Banking. These financial institutions demonstrate excellence in their services, maintain financial stability, foster trust among its clients, and prioritise innovation and customer satisfaction.

In an economic climate where financial institutions face increasing competition and evolving customer expectations, the banks recognised as the best in the UK exhibit remarkable resilience and innovation through delivering exceptional customer service, leveraging advanced technologies, demonstrating rigorous risk management practices, and adapting to evolving regulatory compliance in the face of rising consumer expectations.

In recent years, the financial services industry has witnessed a series of significant transformations from the emergence of agile fintech competitors to the global shift towards digitisation. These have reshaped traditional customer relationships by bringing 24/7 self-service and shutting down a large number of bank branches across the country.

In 2023, the surge in interest rates globally devalued fixed-rate securities in which banks had invested and the heightened market volatility introduced challenges to the UK's financial sector.

Nevertheless, the UK banking system will remain resilient even if subjected to an even worse economic climate, that is, if the Bank of England's (BoE) stress tests are to be considered. The collapse of Credit Suisse and mid-sized US banks including Silicon Valley and Signature Bank due to reporting irregularities, over-exposure to private equity-backed tech startups, or corporate mismanagement did not affect the local markets, according to the BoE.

Given the resilience of UK banks, as evidenced by their ability to weather challenges, we have compiled a list of financial institutions that consistently adapt and improve their products, services, and customer solutions. These banks are not only reestablishing their commitment to customer experience but are also contributing to the country's reputation as a global financial services hub.

Methodology

To determine the banks in this list, we ranked national banks based on the Competition and Markets Authority (CMA) and IPSOS's list of top British banks for personal current accounts published in August 2023.

1. Monzo

Founded in 2015, Monzo, one of the leading challenger banks in the UK, has rapidly gained traction in the highly competitive fintech sector. The company claims to have more than 650,000 users and 3,000 daily account openings with over £1 billion in transactions through its smartphone-centric banking platform.

Monzo's innovation extends to its offerings, such as easy-to-use current accounts, the Monzo debit card, and a user-friendly smartphone app. Its entire banking infrastructure is built in-house, distinguishing it from competitors reliant on third-party service providers. This approach, combined with a microservices architecture, allows the bank to rapidly adjust its services to meet customer demands.

2. Starling Bank

Starling Bank has made significant achievements in reshaping the banking industry by offering a modern, customer-centric alternative to traditional banks. It operates primarily through its user-friendly app, offering features such as instant notifications, goal-based savings, nearby payments, and a connected card for controlled spending.

The bank provides a wide range of financial services, including personal, business, joint, euro, and dollar current accounts, as well as a children's account. Moreover, Starling Bank places a strong emphasis on security, offering multiple authentication methods and instant alerts for unrecognised transactions.

In April 2022, its valuation reached more than £2.5 billion following a successful funding round that raised £130.5 million.

3. first direct

first direct is a digital pioneer in the banking industry. Founded by Midland Bank and later acquired by HSBC in 1992, it first introduced the 24/7 telephone-based banking services, a concept considered revolutionary in its time. In 2000, well ahead of the fintech wave, it expanded its services to include internet banking.

Headquartered in Leeds, first direct has chosen to forego the traditional brick-and-mortar branch model entirely and relies on telephone-based and online banking. It offers a range of financial products, including bank accounts, mortgages, loans, credit cards, savings, insurance, and investment accounts.

first direct's mission to disrupt the conventional high street banking model remains at the core of its identity. With a customer base of 1.5 million in the UK, it combines the convenience of modern banking technology with the reliability of its parent company' vast branch network.

4. Halifax

Halifax, a prominent banking brand with a rich history dating back to its establishment as the Halifax Permanent Benefit Building and Investment Society in 1853, has evolved into one of the best performing financial institutions within Lloyds Banking Group (LBG).

Headquartered in Yorkshire, it offers diverse financial products and services, which include current accounts, savings accounts for kids and students, mortgages, personal loans, credit cards, and comprehensive insurance offerings such as travel insurance, breakdown cover, home emergency protection, and mobile phone insurance.

In addition, the bank offers a mobile app that includes a feature that rounds up transactions and deposits the difference into your savings account, as well as in-app cashback offers when purchasing from select retailers.

Halifax hosts special prize draws for its depositors. In 2022, it awarded a total of £1.35 million in celebration of its 10-year anniversary.

The bank is also known for publishing the Halifax House Price Index, the country's longest-running monthly house price series with nationwide coverage.

5. Metro Bank

Metro Bank, founded in 2010, is the first new high street bank to open in over a century. It claims to keep banking simple, with transparent products and straightforward rates and charges so that customers are not deceived by hidden terms. The bank has extended store hours and a London-based 24/7 contact centre for customer service.

It also introduced a 15-minute account opening in-branch for faster processing. Customers can either redeem their card from a branch, or have it delivered within seven days if ordered online.

Metro Bank also caters to pet owners with a pet-friendly approach, welcoming dogs in their branches with water bowls, treats, and bandanas. In 2021, it launched its K9 Account that uses a pet's paw print ID so owners can access their pet's account with a paw swipe, either through a dedicated app or contactless payment via a collar-attached chip.

In 2023, Metro Bank expanded its store network in the North of England to provide diverse financial solutions and accessibility for all customers.

6. Lloyds Bank

As a prominent financial institution in the UK, Lloyds offers an extensive range of banking and financial services, including current and savings accounts, credit and debit cards, loans, mortgages, investment products, insurance, and more. As part of the Lloyds Banking Group, it maintains a strong domestic focus and boasts a remarkably diversified business model that has consistently demonstrated its effectiveness, even in adverse economic conditions.

Through the years, Lloyds has become more strategic with its digital transformation, driven by its commitment to addressing evolving customer demands by restructuring its operations and embracing digital solutions. The bank has modified its operating models and leadership engagement to differentiate itself in the market and stay at the forefront of the evolving industry.

Furthermore, Lloyds registered a notable profit growth in 2023 because of rising interest rates, reinforcing its position as one of the most resilient banking institutions.

7. Bank of Scotland

Bank of Scotland, established in 1695, holds the distinction of being Scotland's oldest bank and closely trails the Bank of England in terms of historical significance. In 2001, the bank merged with Halifax to form HBOS plc. Subsequently, the tumultuous global financial markets of January 2009 led to the acquisition of HBOS plc by Lloyds TSB, resulting in the creation of Lloyds Banking Group (LBG), the largest retail bank in the UK.

Today, Bank of Scotland provides banking services to a diverse clientele across Scotland and the wider UK. With a customer base of 2.8 million, the bank operates a network of 660 branches within Scotland's borders. Bolstered by rising interest rates and strategic adaptations within the sector, it recorded a 46 per cent surge in profits during the first quarter of 2023 compared to the previous year.

While its physical presence extends less extensively throughout the rest of the UK, Bank of Scotland customers can rely on the support of Halifax branches, also under LBG, for essential banking tasks like address updates, check deposits, and cash transactions.

8. Nationwide

Nationwide Building Society, with a rich history dating back to 1875, stands as a prominent provider of residential and commercial mortgages and consumer banking solutions in the UK. With its headquarters in Swindon, England, the group has grown to become the world's largest building society and one of the UK's major players in mortgages, savings, current accounts, ISAs, credit cards, personal loans, insurance, and investments. It boasts an extensive network of branches across the UK, serving over 16 million members along with digital delivery of services to meet the evolving preferences of its customer base.

The institution goes beyond traditional banking by offering member-exclusive products such as savings accounts, credit cards, loans, and financial planning services. Existing mortgage members benefit from flexible mortgage deal options, with competitive rates akin to those for new customers.

Nationwide recognises that many customers still value the option of visiting a branch for withdrawing cash and checking balances. In June 2023, it announced that it has invested approximately £46 million in preserving and enhancing its network of 605 branches, ensuring its presence remains in towns and cities across the UK and Northern Ireland until at least 2026.

9. Barclays

Over its illustrious 300-year history, Barclays has become a renowned name in the UK financial industry. With a global presence extending to approximately 55 countries, it has firmly established itself as a banking powerhouse.

Throughout its extensive network of over 4,750 branches, the bank offers a range of personal financial services, including wealth management and investment banking. It has also earned recognition for its credit card services for its lucrative rewards program, cashback opportunities, and special financing promotions in both the UK and United States.

Barclays also offers competitive interest rates on savings accounts and certificates of deposit. It has no monthly fees or minimum opening deposit requirements, ensuring accessibility and flexibility for customers. Its high-yield savings account offers a competitive annual percentage yield (APY), outperforming the national average and featuring no minimum deposit requirements or monthly service fees

10. NatWest

NatWest stands as one of the UK's largest and most prominent financial institutions since its establishment in 1968. As part of the Royal Bank of Scotland Group today, it contributes to a global banking presence operating in 36 countries and serving around 24 million customers worldwide.

The bank caters to a wide range of customers, from students to children and teenagers, offering dedicated account options for each demographic. Its diverse range of current and savings accounts includes no monthly fees, contactless debit card and complimentary access to the mobile banking app. Users can round up purchases to the nearest pound, and allocate the difference to their savings. They can also withdraw from an ATM without their card for up to £130 every 24 hours.

NatWest has also set a mission to assist 10 million individuals annually in managing their financial health by 2027. Through digital tools, financial health checks, and accessible services available to both customers and non-customers alike, the bank continues to promote financial literacy.

11. Santander UK

As part of the global Santander banking group headquartered in Spain, Santander UK serves as one of the UK's largest banks, boasting a vast infrastructure comprising 20,000 staff members, 444 branches, and a customer base exceeding 14 million individuals and enterprises.

Santander UK offers a variety of banking services including credit cards, insurance, mortgages, savings, and investment opportunities.

The bank offers some of the most generous rewards to British depositors. Clients can earn substantial cashback of up to £15 monthly on household expenses, supermarket purchases, and travel expenditures.

12. HSBC UK

HSBC UK boasts an extensive branch network spanning the entire country. It maintains 327 branches, though not all provide the full range of services. What sets HSBC UK apart is it can facilitate the setup of accounts for those planning to move to the UK prior to their arrival. Its financial products include current and savings accounts, foreign currency accounts, credit cards, mortgages, and insurance offerings.

For everyday banking needs, customers can benefit from the bank's current account offerings that include monthly savings of £25 to £250 with a 5% interest return on savings, and application for an overdraft.

The HSBC mobile app offers peer-to-peer payments, contactless payment options, and compatibility with Google/Apple Pay.

In 2023, it partnered with Nova Credit to become the first UK bank to offer newcomers in the country the option to include their international credit history when applying for a credit card free of charge during the HSBC UK credit card online application process.

13. The Co-operative Bank

This Manchester-based bank is known for its ethical banking practices that prohibits it from engaging in investments in industries such as the arms trade, genetic engineering, animal testing, sweatshop labour, and fossil fuel extraction.

In 2006, it rejected nearly £10 million in business because of its policy rooted in the bank's dedication to people, the planet, and the community, underlining commitments to animal welfare, climate change mitigation, ethical employment practices, and exclusive collaboration with businesses that share these values. The bank publishes an annual sustainability report to gauge its progress against these ethical benchmarks.

It prides itself as the UK's first bank to adopt a customer-led Ethical Policy to consistently advocate for local communities, fair and honest business practices, and equitable wages for workers.

The bank offers a diverse range of current account options catering to different customer needs. They can choose from a no-fee current account, a packaged bank account with travel insurance, or an account designed for those with no credit history or a low credit score.

14. Virgin Money UK

Virgin Money UK, originally founded by Richard Branson as a disruptive banking startup in 1995, has undergone significant transformations over the years. Through mergers and acquisitions, it has evolved into a prominent player in the UK's banking industry. In 2018, Virgin Money was acquired by CYBG, which already owned Clydesdale Bank and Yorkshire Bank at that time. This led to the rebranding of the entire entity as Virgin Money UK plc after a year.

The bank demonstrated a robust financial performance in the third quarter of 2023, marked by substantial growth in net lending and deposits, and stable credit quality. Despite a subdued market environment, mortgage balances totaling £57.5 billion remained relatively stable for the said quarter.

The bank offers a range of market-leading products and services to meet diverse banking needs of its 6.6 million customers. In addition, it has invested on its digital platform driven by the increase in the use of digital banking channels over their traditional brick-and-mortar locations.

Virgin Money UK's current account offerings provide attractive features, including a competitive 2.02 per cent AER on current account balances of up to £1,000, and cashback incentives from select retailers.

15. TSB Bank

TSB Bank traces its roots back to its establishment in 1839 and now serves more than 5 million customers through a network of branches all over the UK. The bank offers digital tools and services tailored to simplify financial management for its clients.

TSB Bank's pioneering 'Fraud Refund Guarantee,' which was launched in 2019, outpaces industry standards by refunding 97 per cent of claims related to fraud. TSB customers are safeguarded against honest mistakes as well, reinforcing the bank's commitment to their financial well-being.

Moreover, TSB actively engages in fraud prevention through its dedicated 'Fraud Prevention Centre' and collaborates with law enforcement to pursue criminals involved in fraudulent activities.

The bank's financial offerings include a current account that allows customers to save

between £25 and £250 monthly by standing order, with no withdrawal charges.

In February 2023, it launched banking pods to replace local branch services that are scheduled for closure or to establish a presence in areas where the bank currently doesn't have physical branches.

16. Royal Bank of Scotland

Founded in 1727, the Royal Bank of Scotland (RBS) holds a distinguished position in the annals of banking history. It achieved prominence through innovations such as introducing the world's first overdraft and pioneering the concept of a house purchase loan by a UK bank. RBS has consistently led the way in banking, offering groundbreaking services such as the first fully-fledged internet banking platform.

Although the bank faced a high-profile £45 billion bailout during the 2008 financial crisis, it successfully repaid it in 2013. Today, with a customer base of 3.3 million, this NatWest subsidiary offers secure transactions, balance checks, and an array of innovative features, including 'Get Cash' for ATM withdrawals via the app and a round-up feature that facilitates savings account transfers for rounded transactions. Users can also conveniently monitor their credit score through the app, with regular updates every 30 days.