Re-thinking the e-savings experience for retail and business customers
COVID-19 lockdowns triggered a huge increase in savings in the UK. In June 2021 alone, households deposited an additional £9.8 billion with banks and building societies. In 2020, the household savings ratio - the percentage of disposable income households put away, soared to 16.3%.
This jump has been attributed in part to curtailed spending opportunities following shutdowns in leisure, hospitality and retail; and to economic uncertainty prompting citizens to build a savings buffer.
According to research by Aviva, more than a third (36%) of consumers plan to maintain their new saving habits. With low interest rates persisting and customers still insecure about their finances, many are on the lookout for alternative places to store their money as inflation rises.
In this environment, banks and building societies have no choice but to innovate, designing different product features and benefits in their digital banking offerings, rather than focusing on the headline rate. As the Mintel report ‘UK Deposit And Savings Accounts Market 2021’ Report makes clear, a key strategy here is to improve digital experiences, making online investment spaces more accessible and functional.
In parallel, COVID-19 has accelerated customers’ adoption of mobile banking apps and digital banking across the globe. Banking transformation is charging ahead.
One US survey shows that 53% of consumers who are banking digitally today had switched to digital banking as a result of the pandemic, embracing the speed, security, safety and convenience of digital. Just over a fifth (21%) of U.S. consumers consider an easy-to-use mobile banking app as the most important benefit their financial institution provides.
When it comes to the UK’s small-to-medium enterprises (SMEs), 83% use mobile banking according to Bank of England, and almost 100% use online banking. 36% of British savers are using a savings app or online tool.
The statistics certainly tell a powerful story about digital uptake. According to The Financial Brand, experts in the financial sector estimate the pandemic expedited the trajectory of digital banking solutions anywhere from three to ten years. The forecast is that the vast majority who have pivoted to digital channels will not switch back.
As consumers move en masse into digital solutions, the savings space is increasingly crowded with competitors. Leading financial services providers are having to re-evaluate their tech stacks and figure out the best tools and functionality to satiate customer demand.
Just as importantly, they’re realising they need to deliver the kind of smooth digital experience customers are accustomed to in other parts of their lives, whether they’re shopping online or ordering an Uber.
According to PWC, the UK’s best-in-class banks currently have up to 60% SoW, with the laggards at only 10 to 20%. Financial institutions are now catering to consumers who have more choice and easier access to financial products and services than ever before, and whose expectations for world-class digital interactions have never been higher. There is no room for complacency in digital banking, and certainly not in e-savings.
A lot of banks that are generating above-average deposit growth are investing in technology, according research carried out by PWC. But where should investment be directed specifically?
Top priorities are: faster and more seamless onboarding of customers; better access to financial information; improved transparency; and faster transaction processing. Also on the list: more secure identity authentication and better support for the customer lifecycle.
Improving SoW is also about banks and building societies being able to supply the right information or offer at the right time and on the right channel. To be able to engage in a meaningful way with users and increase product usage, banks need to be analyzing multiple data sets to interpret customers on an individual basis and address them at a more granular level.
The kind of interactions that will stop customers from taking their wallets elsewhere must address demographics, needs, preferences and geographies, with tailored messaging that is personalised and relevant.
This is how banks seize those opportunities to grow revenue, help customers solve their individual financial issues, and deepen and solidify long-term loyalty, says PWC. It’s also how organisations become the primary financial institution for more customers.
Old-fashioned, cumbersome systems continue to persist in UK banks and building societies, despite ongoing refinement of digital offerings.
Today, automation platforms can manifestly improve the customer journey and bolster loyalty, including in e-savings. In many instances it can be as simple as reordering the format of a page to reduce the number of clicks to complete a transaction or action.
With Bankfast Apply supporting e-savings onboarding, customers benefit from real-time verification of identity and bank details, and have the benefit of an easy, conversational UX accessible anywhere, anytime on any device. Back office features including Tranche Management, which is a component of product BankFast Apply, allows financial institutions to easily, and quickly, manage the flow of retail and business deposits. It takes the guess work out of predicting when a savings product tranche is full which supports risk management.
BankFast is an out-of-the-box (OOTB), extendable, end-to-end digital platform that covers retail and business savings accounts, boosting customer trust and transparency through fast, simple, secure access to daily banking services.
Sandstone’s Mobile App gives users a fluid, native, personalised experience, with full account visibility and data relevant to their financial wellbeing, in a fast, responsive interface.
Sandstone understands the needs of banks and building societies, and their retail and business savers. Our expertise means we can support you in delivering customer-centric digital journeys to attract and retain your ideal customers. Our digital banking solutions provide seamless customer journeys including digital maturity instructions.
Our solutions enable: straight through processing (origination and servicing - Automated KYC/AML), real time account opening, tranche management, strong customer authentication (SCA) and regulatory compliance.
We offer multiple delivery models including cloud, optimised journeys covering multiple savings products (regular savers, bonds, term, ISA, etc.) as well as retail and commercial deposit origination and servicing.
Sandstone e-savings solutions are already servicing established financial organisations in the UK including Cumberland Building Society, Shawbrook Bank and Arbuthnot Latham. Because we’re an integration specialist, we make things easier by hooking into organisations’ core banking systems, instead of having to start from scratch.
Published September 2021
As big data becomes a fact of life for both consumers and banks, it introduces new avenues for creating revenue streams...
In the first half of 2021, Australians have experienced a major bottleneck in loan application approvals...
Doing the right thing by your regulatory obligations, while being customer focused, and keeping your team engaged is like trying to fit together...