Best Alternatives to Banks in Europe

Neobanks, Fintech Apps, and Digital Accounts

TL;DR – Quick Summary: European consumers in 2025 have more high-quality alternatives to traditional banks than at any point in financial history. Revolut, N26, Wise, Monzo, bunq, Starling, and Qonto offer checking accounts, debit cards, international transfers, budgeting tools, and in some cases investment and lending products — most at zero or near-zero monthly cost. Fully licensed neobanks in Europe include Revolut (European banking licence), N26 (German banking licence), Monzo (UK banking licence), Starling (UK banking licence), and bunq (Dutch banking licence), all offering FSCS or EU deposit guarantee scheme protection. Wise, while not a bank, is regulated as an e-money institution under the FCA and provides mid-market rate international transfers and a multi-currency account that outperforms every traditional European bank on cross-border transactions. This guide helps you identify the right alternative for your specific situation.

Table of Contents

1. Why Europeans Are Leaving Traditional Banks

2. Types of Bank Alternatives in Europe

3. Revolut: The Multi-Currency Super-App

4. N26: The Licensed European Neobank

5. Wise: Best for International Transfers and Multi-Currency Accounts

6. Monzo and Starling: UK-Licensed Challengers

7. bunq: The Sustainable European Digital Bank

8. Qonto: Best for Freelancers and SMEs in Europe

9. How to Choose the Right Bank Alternative in Europe

10. Are European Neobanks Safe? Deposit Protection Explained

11. FAQs About Alternatives to Banks in Europe

Why Europeans Are Leaving Traditional Banks

European consumers are leaving traditional banks for a combination of reasons that have been building for over a decade. Monthly maintenance fees of €5 to €20 for basic current accounts, currency conversion markups of 3% to 5% on international card spending, outdated mobile banking interfaces, poor customer service response times, and two to five day SEPA credit transfer processing times for what are often routine transactions have collectively eroded the value proposition of the incumbent banking model for a generation of digitally capable consumers. The 2007 to 2009 financial crisis, which severely damaged public trust in European banking institutions, accelerated this sentiment shift without immediately providing viable digital alternatives. It was the regulatory reform that followed — particularly the European Union's Payment Services Directive 2 (PSD2), which mandated open banking API access and lowered barriers to payment service licensing — that enabled the fintech ecosystem to emerge as a genuine alternative in the 2015 to 2025 period.

Today, Europe is the world's most mature region for neobank and fintech alternatives to traditional banking, with over 1,600 licensed fintech firms operating in the UK alone and major continental players including N26, Revolut, bunq, and Qonto collectively serving tens of millions of European consumers. The competitive intensity created by this ecosystem has improved features, reduced fees, and raised user experience standards across the entire industry — including at traditional banks that have been forced to accelerate their own digital transformation in response to customer flight risk.

Types of Bank Alternatives in Europe

Understanding the category distinctions among European bank alternatives is essential to choosing the right provider. Full banking licence neobanks — including N26 (German banking licence), Monzo (UK FCA/PRA banking licence), Starling (UK banking licence), and bunq (Dutch banking licence) — hold the same regulatory status as traditional banks. They take deposits directly, hold them on their own balance sheets, and those deposits are covered by the relevant national deposit guarantee scheme: €100,000 per depositor under the EU Deposit Guarantee Schemes Directive, or £85,000 under the UK FSCS. E-money institution (EMI) licence holders — including Wise and Revolut's legacy e-money operations — do not hold full banking licences in all jurisdictions. They are required to safeguard customer funds in ring-fenced accounts at licensed credit institutions, providing protection but not equivalent to deposit insurance. Revolut obtained a European banking licence in Lithuania in 2021, which covers EU customers. Wise holds an e-money licence but applies safeguarding requirements that provide equivalent fund protection. International money transfer specialists — primarily Wise — are distinct from neobanks in that their primary product is currency conversion and cross-border payments, with current account and card functionality as supporting features rather than the core proposition.

Revolut: The Multi-Currency Super-App

Revolut is the most geographically ambitious European bank alternative, serving over 65 million customers across 48 countries with a product suite that extends well beyond banking. Its multi-currency account allows users to hold, convert, and spend in 36 currencies. The Revolut debit card applies the mid-market exchange rate within monthly fair usage limits on standard plans, making it one of the most cost-effective travel spending cards available in Europe. The core Revolut Standard plan is free, offering a virtual card, free SEPA transfers, currency exchange within monthly limits, and budgeting analytics. Paid tiers — Plus, Premium, and Metal — add benefits including higher ATM limits, travel insurance, lounge access, and enhanced customer support priority. Revolut's European customers are covered by its Lithuanian banking licence, providing EU deposit guarantee protection up to €100,000. UK customers are served under Revolut's UK banking licence obtained in 2025, with FSCS protection up to £85,000. Revolut's key limitation is its breadth-over-depth approach: its product scope is extraordinary, but some products — including crypto trading, stock investing, and lending — receive less regulatory oversight in all jurisdictions than equivalent products from fully licensed specialist providers.

N26: The Licensed European Neobank

N26, headquartered in Berlin and holding a full German banking licence from BaFin, is the neobank most structurally equivalent to a traditional bank for European consumers. Its banking licence covers 24 EU/EEA markets, providing full deposit guarantee scheme protection and making N26 suitable for consumers who need the security assurance of a licensed bank alongside the user experience of a neobank. N26's free Standard account provides a Mastercard debit card, SEPA transfers, and basic spending analytics. N26 Smart, You, and Metal tiers provide additional features including sub-accounts called Spaces (savings pots), travel insurance, and partner benefits at increasing monthly fee levels. N26's savings accounts link to the European Central Bank rate, providing competitive savings interest for European consumers. The platform is particularly popular in Germany, Austria, France, Spain, and Italy, where its localised customer support in multiple languages addresses a common pain point with digital-only providers. N26's weakness relative to Revolut is its narrower geographic reach — it exited the US and UK markets in 2020 and 2021 — and the more limited scope of non-banking financial services within the app.

Wise: Best for International Transfers and Multi-Currency Accounts

Wise is not a bank but operates as an FCA-regulated e-money institution with a product that is superior to every traditional European bank and most neobanks for international currency management. Its multi-currency account holds 50+ currency balances simultaneously and provides local account details — European IBAN, UK sort code and account number, US routing details, and equivalents in multiple other markets — enabling users to receive money in different currencies as if they held local accounts in each country. The Wise debit card spends in 150+ currencies at the mid-market exchange rate with a small transparent conversion fee, typically 0.41% to 1.0% for major currency pairs — compared to 3% to 5% charged by most traditional European banks on foreign currency transactions. For European expats, digital nomads, remote workers earning in multiple currencies, and anyone who transfers money internationally with any regularity, Wise's cost advantage over traditional banking is substantial and compounding. Its limitation relative to licensed neobanks is the absence of FDIC or EU deposit guarantee scheme protection — though its FCA-mandated fund safeguarding requirements provide meaningful consumer protection — and the lack of credit products.

Monzo and Starling: UK-Licensed Challengers

Monzo and Starling Bank are the UK's leading fully-licensed neobanks, both holding banking authorisations from the Prudential Regulation Authority and FCA, with deposits covered by the Financial Services Compensation Scheme up to £85,000. Monzo reached 12 million customers in 2025 and achieved its first significant profitability milestone with £113.9 million pre-tax profit, validating a business model built on premium account subscriptions (Monzo Plus and Max), personal lending, and business banking alongside its free current account. Starling Bank, which posted five consecutive years of profitability under founder Anne Boden before her departure in 2023, is particularly strong in the SME and business banking segment, where its integrated accounting tools and business account features have driven a loyalty profile that outperforms consumer-focused competitors. Both are UK-centric and do not serve the wider EU market since Brexit. For UK residents seeking a fully regulated, deposit-protected bank alternative with strong mobile banking features, Monzo and Starling represent the most complete options available.

bunq: The Sustainable European Digital Bank

bunq, the Dutch neobank holding a full European banking licence from De Nederlandsche Bank (DNB), has positioned itself as Europe's most environmentally committed digital bank — planting trees through a Carbon Neutral subscription and offering transparency on how customer deposits are deployed. Beyond its sustainability positioning, bunq offers genuinely innovative banking features: up to 25 sub-accounts (Pockets), which enables sophisticated personal cash management across multiple savings and spending categories; shared accounts for couples and groups; a Travel Card feature with competitive currency conversion; and a Business account suite for freelancers and entrepreneurs. bunq's monthly fees are higher than most competitors — its personal plans start at €2.99 per month and reach €17.99 per month for the premium tier — reflecting a deliberate positioning toward higher-engagement users who value the breadth of features rather than zero-cost basic accounts. As a fully licensed European bank, bunq provides €100,000 deposit guarantee protection for EU customers.

Qonto: Best for Freelancers and SMEs in Europe

Qonto is the leading European neobank alternative specifically built for the business banking needs of freelancers, startups, and small to medium enterprises in France, Germany, Italy, and Spain, with ongoing expansion across additional European markets. Founded in Paris in 2017, Qonto has grown to serve over 400,000 businesses and obtained a credit institution licence enabling it to offer comprehensive banking services beyond e-money functionality. Its product integrates expense management, invoicing, multi-user access with role-based permissions, receipt collection, and accounting software integrations — including Xero, QuickBooks, and Datev — into a single business banking interface. Monthly pricing starts at €9 per month for solo plans and scales to €249 per month for the largest enterprise tier with the most extensive user seats, card allowances, and integrations. For European SME owners frustrated with traditional business bank account opening processes that can take weeks, Qonto's online-only application and rapid approval process represents a significant operational improvement.

How to Choose the Right Bank Alternative in Europe

The optimal bank alternative for any European consumer depends on their specific profile and primary financial needs. For daily spending and fee-free domestic banking across the EU, N26's Standard account or Revolut's Standard plan are the zero-cost entry points. For international travel and cross-border spending across multiple currencies, Wise's multi-currency account and debit card deliver the best exchange rate outcomes in the market. For UK residents requiring a fully featured, FSCS-protected current account with excellent mobile banking, Monzo or Starling are the optimal choices. For European freelancers and small business owners, Qonto's integrated business banking and expense management platform provides the most relevant functionality. For consumers who want a single app combining banking, investments, crypto, and international transfers under a licensed banking structure, Revolut's EU banking licence and broad product scope make it the most comprehensive single-platform option. Most financially sophisticated consumers end up using two or three providers — a neobank for daily banking, Wise for international transfers and foreign currency spending, and a specialist investment platform for savings and wealth management — rather than consolidating everything into a single provider that may not excel at all functions.

Are European Neobanks Safe? Deposit Protection Explained

Safety in the context of European bank alternatives depends on the specific provider's regulatory structure. Fully licensed European banks — N26, Monzo, Starling, bunq, Revolut (EU customers under Lithuanian banking licence; UK customers under UK banking licence) — hold deposits covered by national deposit guarantee schemes providing €100,000 per depositor (EU) or £85,000 (UK FSCS) in the event of bank failure. E-money institution licence holders — Wise and the e-money operations of providers not yet holding full banking licences — are required to safeguard customer funds in segregated accounts at licensed credit institutions, providing fund protection but not equivalent to deposit insurance. Consumer protection verification should be a non-negotiable step before depositing significant balances with any provider: check the provider's regulatory status on the FCA Register (UK) or the relevant national competent authority register (EU), and confirm whether deposits are covered by a formal deposit guarantee scheme.

Frequently Asked Questions

What is the best bank alternative in Europe in 2025?

The best bank alternative in Europe depends on your primary use case. For multi-currency accounts and international transfers at the best exchange rates, Wise is the market leader. For a free, fully-licensed EU digital bank for everyday spending, N26 or Revolut are the strongest options. For UK residents, Monzo and Starling provide fully FSCS-protected banking with excellent mobile apps. For European freelancers and SMEs, Qonto's integrated business banking platform is the most relevant choice. Most users benefit from using two providers — a neobank for daily banking and Wise for international transfers.

Are neobanks in Europe covered by deposit protection?

Fully licensed European neobanks are covered by EU deposit guarantee schemes up to €100,000 per depositor (UK FSCS covers up to £85,000). N26, bunq, and Revolut (EU customers) hold full banking licences with deposit guarantee coverage. E-money institutions like Wise safeguard customer funds in ring-fenced accounts at licensed banks, providing fund protection but not equivalent to formal deposit insurance. Always verify the specific regulatory status and deposit protection arrangements of any provider before depositing significant balances.

Can I use a neobank as my primary bank in Europe?

Yes — millions of Europeans use neobanks as their sole primary bank. Fully licensed neobanks including N26, Monzo, Starling, and Revolut offer IBAN or sort code accounts capable of receiving salary payments, direct debits, and SEPA transfers. They provide debit cards, mobile payment integration, and in many cases overdraft and lending facilities. The primary limitation is the absence of physical branches — all service is digital. Consumers who require in-person banking for cash handling, notarised documents, or complex financial transactions may need to maintain a secondary traditional bank relationship for these specific needs.

Which European bank alternative has the best exchange rates for travel?

Wise offers the best exchange rates for travel among European bank alternatives, applying the mid-market interbank rate with a transparent small percentage fee — typically under 1% for major currency pairs. The Wise debit card can spend in 150+ currencies using pre-converted balances held in the Wise multi-currency account with no conversion fee at point of purchase. Revolut provides competitive mid-market rates within monthly limits on standard plans, with a 0.5% weekend surcharge on major currencies. Both significantly outperform traditional bank debit and credit cards, which typically embed 3% to 5% exchange rate margins on international spending.

Is Revolut or Wise better for European consumers?

Revolut and Wise serve overlapping but distinct primary use cases. Wise is unequivocally better for international money transfers and multi-currency account management — it applies the mid-market rate transparently, supports 50+ currency balances, and provides local account details in multiple countries. Revolut is better as a comprehensive everyday banking and financial services platform — it offers a broader product ecosystem including investment, crypto, and premium lifestyle benefits, alongside its banking and payment functionality. For pure exchange rate quality on international transactions, Wise leads. For a feature-rich, all-in-one financial app for daily use, Revolut's broader product scope makes it the stronger daily banking alternative for many European consumers.