When it comes to instant access savings accounts, it’s not all about securing the best rate, according to research from digital agency, MagiClick.  A survey of over 2,000 UK adults, undertaken in conjunction with YouGov, revealed that also being able to securely manage your savings account via a mobile app is a key factor when it comes to choosing an instant access savings account provider.

Highlights:

·       78% said that it was important for an instant access savings provider to supply clients with a mobile app

·       33% said they wouldn’t open an instant access savings account if the provider didn’t have a mobile app

·       Over a third 34% are likely to be lured away to another savings provider if they offered a better mobile banking app experience

Respondents were asked to consider factors other than the savings rate, specifically the importance of having access to a mobile app for their instant access savings account, and an overwhelming majority stated that this was key.

78% of those questioned said that it was important for an instant access savings provider to supply clients with a mobile app which would enable them to securely manage their account.   Surprisingly, it’s not just the youngest adults who are driving the demand.  91% of respondents who agreed with this sentiment were aged 25–34 years old closely followed by 35-44 year olds with 90%.  18-24 year olds polled 82% and 45-54 year olds 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 62% saying that it was an important feature.

So what does this mean for savings providers without an app?  A recent look at a leading comparison site highlights that easy access savings providers who offer an app are in the minority with only two of the top ten providers listed suggesting they come with an app. For savings providers who want to attract more clients, an app could be the answer.

Key points:

·       There is a clear demand from all ages, not just young people but also those older savers with larger savings values

·       The pandemic drove a need for consumers to manage their money, and other aspects of their lives, virtually. This has resulted in app adoption by all generations and age groups

·       In a high savings rate environment, savings are back on the agenda after languishing in the doldrums for more than a decade. But how long will these high rates hold?  A provider looking to secure clients before rates potentially slide could benefit from an app, enabling clients to open their account and seize a rate in minutes

·       Apps provide banks and savings providers with essential customer data – 37% of people in the UK access their bank accounts at least once a week via a mobile app. This intelligence can be used by providers to help improve their services and communication with clients

MagiClick’s 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. When asked ‘if a savings provider did not offer a mobile app would you still open an instant savings account with them’, a third (33%) said no with a further 25% saying they didn’t know, suggesting that this would certainly need some consideration. Again, it was the 25-34 year olds who were most decisive with approx. half (49%) stating that they would not open an account with an instant access savings provider if they did not have a mobile app.

Coincidentally, of the 8 million cash ISA subscriptions in the UK, it is the 25-34 year olds who hold the largest number with approx. 2.25 million. It’s likely that a significant number of these will be instant access savings accounts.   In addition, the average ISA (cash and stocks & shares) market value at the end of 2020 to 2021 was £9,313 for the 25-34 age group, so those savings providers who do not have an app may well find themselves missing out on potential savvy saver clients. Considering the demand for such apps by this age group, and the fact that they are keen savers, there’s an opportunity here for instant access savings account providers to review their digital and app services to ensure that they meet their current and future customers’ needs.

This is particularly key given that over a third of all respondents said they would likely switch to another savings provider if they offered a better mobile banking app experience.  Approx. half of 18-24 year olds (52%) and 25-34 year olds (46%) agreed with this sentiment. Even amongst older savers, nearly a quarter (23%) of over 55s said that they were likely to switch savings providers should they find one that offered a better mobile app. 

Mark Lusted, CEO of MagiClick UK commented;

“Smartphones and mobile apps are transforming the way that consumers manage their lives, from ordering their grocery shop to trading on the stock market. And why should instant access savings accounts be any different?  But a quick look at the top providers reveals that the majority do not have an app which means they could be missing out on securing essential savings custom. 

“We know that some banks and building societies, particularly smaller ones, have technology challenges to overcome and competing priorities for their digital budgets, which may explain the lack of availability of apps from many. But in an increasingly competitive savings market, our research has demonstrated a clear preference from most users to use an app, and those that don’t may be missing a trick.”

“Developing an app for savings’ clients will not only give providers the commercial advantage but it will also give them access to important client data – data that can be used to continually improve their products and services in line with the varying needs of the UK’s savers, helping them to win and retain customers for the longer term.”