Finally, after a long period of very low savings rates, savers now have real choice of savings provider, although it’s clear that savers need to move quickly to secure a good rate, and many seem to be doing so.
The Bank of England Money and Credit October 2023 report published on 29 November, noted that households deposited £4.6bn with banks and building societies in October, the highest since November 2022. This was driven by net flows into interest-bearing time deposits of £4.0bn but were partly offset by net outflows from non-interest bearing sight deposit accounts amounting to £1.7 bn in October.
However, when shopping around for a savings provider, is it just about rate? Our recent research would indicate that it isn’t.
We conducted a poll recently which revealed a shift in the criteria influencing the choices of British consumers when it comes to choosing a new bank account. The research highlighted that interest rates are no longer the sole determinant in decision-making, as 79% of respondents now emphasise the critical role of having a mobile app when selecting a banking provider.
Contrary to conventional expectations, this demand for mobile apps is not solely driven by the youngest demographic. Some 92% of respondents aged 25-34 agreed with this sentiment followed by 91% aged 35-44 years old. The 18-24 year old age group and 45-54 year olds both polled 86%. The over 55s, a generation often unfairly portrayed as the least tech savvy, were also keen to have access to an app for their instant access savings account with 64% saying that it was an important feature.
In addition, 33% said they wouldn’t open an instant access savings account if the provider didn’t have a mobile app with over a third saying they would be lured away to another savings provider if they offered a better mobile banking app experience.
Our respondents even went so far as to say that they would consider disregarding one savings provider over another if that provider didn’t offer a mobile app for their instant access savings account.
Huge demand for banking apps
In our opinion, this research has confirmed a significant demand for mobile banking apps across generations, with key benefits for all.
The closure of physical high street locations has spurred people to explore alternative banking options and significant technological strides have been made since the COVID-19 pandemic, which we expect to see as a continued evolution in 2024 and beyond.
Whether it’s instant access savers without a local bank branch or those with accessibility or mobility needs, a mobile app provides the convenience of managing savings from the comfort of home and on the move.
With cuts being routinely made to savings rates along with many commentators calling for the Bank of England to start to drop interest rates, cuts will start to gather speed and so those savers who haven’t locked in a fixed rate deal yet should start to shop around now and whether the provider has an app or not may be the determining factor.
Mark Lusted, CEO, MagiClick UK
