Banking
Banking digitisation in the US and UK: it’s a marathon, not a sprint
Published by Jessica Weisman-Pitts
Posted on November 12, 2024
6 min readLast updated: January 28, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on November 12, 2024
6 min readLast updated: January 28, 2026
Alex Reddish
By Alex Reddish, Head of Market Expansion & GTM Strategy at Tribe Payments
The journey that banking digitisation has taken in both the US and UK has been less of a sprint and more of a marathon, with some twists, turns and potholes to navigate along the way. As the years have rolled on, technology innovations have gradually influenced how people interact with money. We’ve seen how embedding convenience, security and flexibility into consumers’ payment journeys has reshaped the entire payment landscape.
As the famous saying goes, the US and UK are two countries divided by a common language. Both markets have lots of characteristics in common – mature, well-regulated financial and payment systems, populations that have a high engagement level with financial services, and excellent telecom and internet penetration levels. But the way each market has embraced widespread digital banking shifts over the past few years tells two very contrasting stories.
The UK and mainland Europe can boast near-total saturation of digital banking services, thanks to commonalities including chip and PIN infrastructure, and in a post-Brexit world, a mirroring of regulations enabling laws to be transposed easily. On the other hand, the US has charted a slightly different path. Chip and PIN was implemented in the US a good 10 years after the rest of the world had done so, and to some extent enabled the US to skip certain stages like contactless payments and move straight to digital wallets.
It’s fair to say significant progress has been made on both sides of the pond, however major challenges remain. When it comes to modernising outdated banking systems and navigating complex regulatory frameworks, the US and UK have drifted in different directions, at the expense of interoperability and cross-border banking efficiencies.
So, we need to ask: how can these regions continue to remove these roadblocks and give customers the feature-rich, hyper-personalised banking experiences they expect?
Digital banking: a tale of two markets
In the UK and across mainland Europe, digital banking is now second nature for many. With extensive and long-established digital channels in place for more than 20 years now, consumers in these regions expect to manage their finances online with ease, whether that’s checking balances, transferring funds, or applying for loans. This shift reflects how convenience and access have become the cornerstones of modern banking.
But while the UK and Europe may be close to ‘peak’ digital banking, the pace of innovation is not slowing down. As regulatory frameworks emerge to provide guardrails to new services (like AI) and consumers expect faster, more immersive payment experiences, banks have to ensure that they can continue to adapt and meet shifting consumer demand with dynamic, future-proof services that will keep customers coming back for more.
Over in the US – which unsurprisingly happens to be the world’s largest financial services market – the pace of change has lagged, but the journey is just as interesting and with some quirks not found in other markets. A great example is contactless – thanks to Europe’s chip and PIN infrastructure, the rollout of contactless was relatively easy from a technical standpoint, whereas the US skipped this step and embraced digital wallets instead. Tech providers leapt into action much sooner than their UK and European counterparts, forming partnerships with banks and merchants to create wallet-based services that could provide a host of appealing services.
For many US consumers, smartphones are now their all-in-one portal for financial management, bill splitting with friends, rich reward schemes and ecommerce, with the added security of tokenisation and biometric authentication. But as impressive as this adoption has been, there are considerable challenges ahead.
The battle against legacy systems
One commonality affecting both the US and UK to their disadvantage is legacy banking tech. Updating outdated banking systems is arguably the biggest roadblock in the way of greater banking efficiencies for both regions. For example, the 2024 launch of Santander’s digital bank, Openbank, in the US was met with both excitement and caution. A huge success in Santander’s native Spain, Openbank may not achieve the same degree of success in the US, due to systems like the Automated Clearing House (ACH), which aren’t built for today’s digital-first world.
While traditional banks seek to overhaul their legacy systems and embrace the latest technologies to emulate the success of neobanks, neobanks are shifting their strategies too. A growing number of neobanks are going full circle and are now expanding into traditional banking products like mortgages and personal loans, offering customers a fuller range of services and building deeper, more meaningful relationships.
Overcoming the obstacles
Both markets face similar and familiar challenges as they strive to realise the full potential of digital banking. Neobanks have to operate under regulatory frameworks designed for conventional banks, which can restrict their pace of innovation. They also face high customer acquisition costs and relatively low revenue per customer.
Meanwhile in the US, long-standing loyalty to credit products, driven by rewards and incentives, still plays a significant role in deepening customer trust. You only have to look at how brands with big pockets like American Express and Chase dominate consumer spending to see that in action. In a market where trust is largely the preserve of traditional banking giants, it’s clear to see that digital banking providers will have to work harder to tempt them away.
This is where the UK has a slight advantage, with banks and consumers having already embraced digital banking more widely, but the journey is not over yet. Banks in both regions can’t afford to be complacent when it comes to building consumer trust, developing personalised experiences, and offering tailored solutions that grab the interest of customers.
The future of banking
Like I said, digital banking transformation is a marathon, not a sprint. As digital banking evolves, there is massive potential to enhance customer experiences even further. The key to doing this successfully and sustainably is by embracing cutting-edge technology and harnessing the full power of data. Banks can then create intuitive, personalised services that make everything from onboarding to credit applications faster, more accurate and more compelling for customers.
As for what the future of banking will look like, it will be shaped by how well institutions in both the US and UK approach and resolve challenges through updating infrastructures, navigating regulatory complexities, and meeting the ever-changing needs and demands of consumers. If banks on both sides of the pond succeed, the rewards will be immense, and everyone will benefit from richer, more personalised banking experiences.
Digital banking refers to the digitization of all traditional banking activities, allowing customers to conduct financial transactions online through mobile apps or websites.
Neobanks are digital-only banks that operate without physical branches, offering services primarily through mobile applications and online platforms.
A legacy banking system refers to outdated technology and processes that traditional banks use, which can hinder their ability to innovate and adapt to modern demands.
Interoperability in banking refers to the ability of different banking systems and services to work together seamlessly, allowing for efficient cross-border transactions and data sharing.
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