Streamlining savings in the digital world: Embracing change

John Tilzey
April 4, 2024
April 3, 2024

In recent years, the savings industry has undergone a remarkable transformation, fuelled by the introduction of new tools and platforms designed to connect savings providers with cost-effective technology and modern infrastructure.

The emergence of aggregators and savings platforms has added complexity to the traditional savings ecosystem, creating greater convenience and choice for savers. However, as these platforms gain traction among consumers, they also present banks and building societies that are currently lacking the necessary technology with a distinctive blend of opportunities and challenges when it comes to joining these platforms.

The potential of aggregators

Traditionally, savings providers reached consumers directly, embracing digital tools gradually to streamline operations. However, the rise of aggregators, such as Money Supermarket, Raisin and Hargreaves Lansdown Active Savings, have disrupted this model and forced savings providers to revamp their technology to participate effectively in these platforms. Aggregators act as intermediaries, offering a centralised platform where savers can access a range of savings accounts from different providers. For instance, Hargreaves Lansdown's Active Savings platform enables savers to conveniently manage a variety of savings accounts, including cash ISAs, from multiple providers, all in one place. This streamlines the process for consumers, ensuring they can secure the best rates and take full advantage of tax benefits with ease.

The dangers of being left behind

While the benefits for savers are evident, integrating with aggregators presents a technological challenge for many savings providers. Without the necessary technological infrastructure, particularly a seamless onboarding process, banks and building societies risk being unable to showcase their products on these platforms and convert an active customer base. Providers still reliant on outdated, paper-based processes are at risk of missing out on expanding their customer base and losing competitiveness in a crowded market.

Furthermore, the consequences of inefficient onboarding processes extend beyond missed collaboration opportunities with aggregators. Providers may have to resort to alternative tactics to attract customers, such as offering higher interest rates or sacrificing margins, which further compromises profitability and hampers smooth operations.

Adapting and thriving in the digital savings era

Looking ahead, the proliferation of aggregators within the savings ecosystem is inevitable, driven by consumers' demand for simplified and comprehensive solutions. To remain competitive, savings providers must prioritise investment in technology. The rise of aggregators and their mobile-friendly offerings represent a defining moment in the evolution of the savings landscape, presenting both challenges and opportunities. Only by embracing innovation and adapting to changing consumer needs can providers successfully navigate this new terrain and unlock the full potential of the digital savings landscape.

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