Re-cap: The Future of Savings
FinTech North / 7th December 2022
On Wednesday 7th December, FinTech North welcomed over 55 delegates from across the Northern FinTech community to Bruntwood SciTech’s state of the art Platform facility in Central Leeds, for our third annual Future of Savings, hosted in partnership with the UK’s leading savings management platform, Newcastle Strategic Solutions.
The event also marked a real milestone for FinTech North – the breakfast seminar was our 100th event!
It truly was an educational and inspiring morning, in which we covered the savings market and its development, the growth of savings platforms and insight into FinTech innovation in the savings space. Themes discussed included education, financial literacy, mainstream bank inertia, what’s next for pensions and more!
A huge thank-you to our speakers for sharing their expertise and for providing some really high-level analysis, insight and informed views. A thank-you also to our amazing sponsors, Newcastle Strategic Solutions, for making the event happen!
FinTech North have produced a write-up for you to re-cap on the event, or simply to read about what we discussed on the day.
Julian Wells, Director of Whitecap Consulting and FinTech North opened our 100th event, welcoming attendees, introducing the event space and the great work Bruntwood SciTech do in the FinTech and Tech sector, as well as a brief introduction to FinTech North.
Julian then welcomed our first speakers, and representatives from our event sponsors; Taya Reynolds, Head of Digital at Newcastle Strategic Solutions and Matt Hanna, Proposition Director at Newcastle Strategic Solutions.
Matt Hanna opened with an analysis of the savings market as it stands today, by sharing key statistics of the current state of play, at both market and consumer level.
- 11.1% Inflation rate
- 5.5% predicted interest rate by mid-2023
- -47 UK consumer confidence score
- £268bn languishing in accounts paying no interest at all
- 8 average number of purchases being paid off by BNPL shoppers
- 65% of 18-24 year olds are prioritising ethical savings over financial returns
- Only 10% of people are expected to be able to add to their savings over the next year
- 1 in 4 households are ‘squeezed spenders’
- £233bn cumulative savings post pandemic
Matt then proceeded to draw on the expertise of Newcastle Strategic Solutions to discuss what the future of savings may look like. The key themes identified were:
- Intergenerational transfer of wealth
- Demand for green/ environmental impact
- High interest rate environment
- Hyper-personalisation and digital expectations
- BNPL & Subscription economy behaviours
- Embedded finance & open banking opportunities
After analysing the predicted trends and factors are set to influence the savings market, Matt went on to discuss how savings providers can react to ensure they are meeting the needs and expectations of savers now and in the future.
- Financial Education; a running theme throughout the seminar, Matt exclaims that education is vital, and more needs to be done to educate savers on how to manage their money most efficiently – especially consumers who benefit from the transfer of wealth.
“Whether that’s understanding how to manage investments and assess risk levels during a recession, or figuring out how to maximise their deposit to reduce their mortgage rate, savings providers have an important role to play in supporting their customers to make sound financial decisions.”
- Financial Inclusion
“Providers need to ensure they don’t alienate their consumers – you must ensure you offer products and services that work for everyone.”
- Product Innovation – Matt highlighted the importance of ensuring your offering is up to date, adapting with the times and ultimately, attractive to your customer. He continued, and highlighted the importance of adhering to ESG and making sure your brand has strong environment and sustainable credentials.
“Retail savings has always proved a popular source of funding for providers but has become increasingly commoditised in recent years, largely driven by rate. Today, high lending costs coupled with a highly competitive market and high interest rates has meant tightening the net interest margins providers can make. Providers have to be able to react quickly in a volatile market and should be asking themselves what else they can do to attract and keep customers above ‘rate’.”.
Matt introduced the various ways in which Newcastle Strategic Solutions support their clients, including retail savings, SME savings, building an ecosystem and digital transformation. Matt then passed over to Taya Reynolds, Head of Digital at Newcastle Strategic Solutions to discuss the digital transformation aspect in more detail.
“We’ve been on a really exciting digital transformation journey, working closely with our clients to ensure we’re building for the future and heightening their customer experience.”
Next up was Kevin Mountford, Co-Founder of Raisin, who joined us to discuss the diversification of deposits raising and the growth of savings platforms.
Kevin firstly highlighted the importance of collaboration in the ecosystem on the path to making savings the best experience it can be, before diving into an update on the size of the savings market; its dysfunctions, the hike in market rates forward pricing and the slow but steady rise in medium term interest rates.
Kevin also spoke about the inefficient deposit value chains for banks, how marketplace platforms in savings are the ‘next big thing in daily banking‘ and provided insight into the changing manufacturing and distribution landscape, before sharing Raisin‘s value proposition, solutions and their numerous success stories.
“The global savings market is huge and there are far more savers than borrowers albeit understandably the media attention focuses on the latter. For various reasons savers are failing to make the most out of their hard earned cash and Raisin is part of a fast growing ‘savings platform’ sector that aims at making life easier for anyone looking to maximise returns on savings”
Antonia Lock, Head of Strategic Initiatives at Nude was up next, and joined us to discuss Nude‘s innovative proposition for first-time buyers. Nude was born out of a vision to address the huge wealth imbalance in the UK, making it easier for younger buyers to skip the jargon and effectively save for their first home.
The savings platform, launched in March 2021 has seen real success, and is a perfect example of innovation in the savings market helping to break down boundaries. Antonia highlighted the importance of goal setting, good influences and how “saving is not a solo activity” – all aspects that are incorporated to the user-friendly and innovative application.
Our final speaker was Mark Mullen, CEO of Atom bank, with his segment on “putting value back in the savings market“. Mark announced that there are “just short of £2 trillion personal deposits in the UK – the highest on record”, before identifying the 5 broad product categories that the savings market is built on:
- Accounts that generally don’t pay interest (£270bn)
- Accounts that offer unrestricted access to your money (£998bn)
- Accounts that restrict access to your money (£176bn)
- Accounts that have tax benefits (£286bn)
- Products offered by NS&I (£211bn)
Mark shared that “rates with smaller banks are currently 2x to 4x better than the large banks”, and that savers with big banks aren’t necessarily compensated with a better overall experience – however, he continued, and shared that big banks are still successful due to the “engineered inertia”, or otherwise, “the tricks and gimmicks that big banks use to convince you to use their service.“. Mark then highlighted examples of how big banks may trick you into using their service:
- ‘Unrestricted Access’ … with restrictions: 2.5% = but you can only access your money 3 times a year
- ‘Big rates’ … but only on small balances: 5.12% = but only on a maximum balance of £5,000
- ‘Better rates’ … but only if you bank with us: 4% = limited to £4,000
Mark alluded that the larger banks don’t necessarily act in the interest of the consumer, and are not legally obliged to tell you everything – only when it suits them.
We closed the event with a panel discussion, featuring Julian Wells, Director of Whitecap Consulting as chair; Taya Reynolds, Head of Digital, Newcastle Strategic Solutions; Matt Hanna, Proposition Director, Newcastle Strategic Solutions; Mark Mullen, CEO, Atom bank; Antonia Lock, Head of Strategic Initiatives, Nude and Kevin Mountford, Co-Founder, Raisin.
The panel was incredibly interactive, and covered themes such as the importance of education, green finance, financial education/inclusion, pensions and the future for FinTech innovation in the market.
Taya Reynolds, Head of Digital, Newcastle Strategic Solutions
Discussing education: “As new technology is introduced it’s vital that the education piece runs alongside it, particularly with the cost of living crisis savings providers need to ensure their customers feel well-informed about adopting the new tech that will help them to get the most out of their money.”
Matt Hanna, Proposition Director, Newcastle Strategic Solutions
Discussing green finance: “We’re seeing a lot of movement in financial services as providers look to be more green, whether that’s offering Green products by carbon offsetting/tracking, producing environmentally friendly cards or pledging to plant trees. While there’s still a lot of work to be done, savings providers are responding to the demand from customers for more ethical savings options.”
Julian Wells then brought the event to a close, and quickly passed to Joe Roche, Engagement Manager of FinTech North who thanked delegates for attending, and highlighted what’s next for our organisation!
The Future of Savings event was hosted in partnership with Newcastle Strategic Solutions