Many people are hesitant to open app-only banks because they’re concerned about what would happen to their money if the company were to go bust. All fully licensed banks are covered by the Financial Services Compensation Scheme (FSCS). The FSCS protects your savings (up to £85,000 per individual) when financial services firms go bust. There are a number of app-based banks that are covered by the FSCS including Starling Bank and Monzo, however, not all app-based banks have this level of protection.
Revolut, Monese and Cashplus aren’t currently FSCS protected as they don’t hold banking licenses, however, they are covered by the Financial Conduct Authority (FCA). This means that your funds are stored separately in a licensed bank that the app company has partnered with. If the app was to go bust, you’ll get 100% of your money back. However, if the bigger bank that stores your money goes bust, your money may not be protected.