We’ve previously examined why people save and invest, the providers they use, and the factors influencing those decisions based on our research, which surveyed more than 6,000 UK consumers through YouGov. The results paint a picture of many people choosing their banking provider, particularly for savings accounts. 

There is dissatisfaction with current providers primarily due to the interest rates they receive and poor customer service. However, overall, many appear more likely than not to stay with their current provider as they meet their basic needs. 

Beneath those findings, we see several trends that will inform the future direction of the savings and investment industry. This won’t be a big bang event where fundamentals change in months but an evolution over many years. Ongoing digital transformation has raised customer expectations of what is possible, with newer entrants directly competing for savings and investment customers. Consumers also shop around to find the best providers when presented with more choices. 

But what are the implications of these trends for providers, and how can they respond?  

A critical finding from the research points to diversification in who people choose to save and invest with. While consumers tend to save with a high street bank or building society initially, they aren’t necessarily closing those accounts; they’re opening additional ones. 

That’s seen in the 57% of those surveyed now using two or more providers to manage their savings. The one-size-fits-all approach is increasingly not fit for purpose given the varying needs and attitudes that lead to consumers having multiple saving products and providers: 

• Safety and security: Some consumers hold multiple accounts to reduce exposure to one firm. The reasons include if a provider drops its interest rate or is affected by a market issue and ensuring any savings balances are within the FSCS protection limits.
• Fulfilling different purposes: 29% of consumers who use multiple providers do so to access different savings accounts, such as cash accounts, for instant access to funds and products with withdrawal limits to take advantage of higher interest rates. Meanwhile, 20% of those with multiple providers said it was to align the products to their specific savings goals, both short-term and long-term, such as a deposit for a property.
• To support a healthy savings habit: Some consumers hold accounts with their main bank and new fintech providers, taking advantage of the passive saving functionality to support positive habits, such as round-ups or minimal weekly contributions.
• Lethargy and opportunity: Others had multiple accounts, opening new ones to take advantage of incentives or introductory rates and forgetting to close old accounts.
• Maximising returns: The savviest, 23% of those surveyed, had multiple products and providers to maximise their return, usually through taking out ISAs with different firms each tax year. 

One participant in the qualitative research interviews summarised why they held so many accounts:  

Another noted participant explained: 

“I like to not have all my eggs in one basket, is the big one. If I plunged all our savings into the Stocks and Shares ISA, and the stock market crashed just before we wanted to retire, that's a reality that could happen. Also, I try to stay below the FSCS threshold.” Female, 34  

Providers need to recognise individuals’ circumstances and consider a broad spectrum of customer needs if they want to develop and deliver effective solutions catering to various demographics. 

One thing is clear: the competition for deposits and assets under management (AuM) has never been tougher.  

The inertia of ‘good enough’ is often a factor in how people view their financial services providers. Respondents are aware they could shop around for a better deal but are also concerned about the time and effort to switch savings providers. 

However, the research also shows that providers shouldn’t assume consumers will remain loyal. 31% are looking to open a savings account with a new provider in the next 12 months, and 24% are undecided. That represents a significant opportunity for firms to show the value they can offer, whether that’s in the form of competitive returns or a personalised experience, to better support consumers’ needs. 

There are also other aspects of our financial lives, such as our current accounts. While many consumers use a savings account from their current account provider, what if their savings or investment provider were to offer current accounts? 

While this is a conceptual model today, some consumers appear willing to switch. Depending on their current provider, 20-30% of consumers would consider changing their current account to those savings or investment platforms. This comes with caveats, as firms will need to demonstrate the benefits of switching, such as better terms, attractive rates, and reassurance that their funds are safe in the form of FSCS eligibility. 

Given the established brands in those segments, this represents a largely untapped area for firms to explore as a new revenue stream. However, that also assumes the same firms will lead the industry when the sector is more competitive than ever. 

We already see newer firms with billions in AuM thanks to digitally native services and support more aligned with consumers' everyday experiences in e-commerce than financial services. 48% of UK consumers agreed that online savings and investment platforms are the industry's future. 

The firms that can help customers build wealth and make their money do more are likely to emerge as the winners. That could be a bank, a building society or an incumbent investment manager. It could be a new breed of savings provider or a left-field challenger like a digital assets exchange that complements its platform with fiat-based options.  

How can firms offer competitive services and excellent customer experience while delivering on the vital trust and reassurance factors consumers demand? 

One way is to partner with ClearBank. For fintech firms, banks, and NBFIs, our Embedded Banking proposition offers the ability to launch high-quality services leveraging our banking licence and infrastructure, including accounts, interest-bearing, easy-access savings accounts and flexible Cash ISAs, all with FSCS protection eligibility.  

ClearBank is also proven to deliver increased profits through offering instant-access savings accounts to its existing investment customers, attracting and onboarding net-new customers via savings accounts and cross-selling other services.