Today’s savings environment is characterised by low interest rates with the light at the end of the tunnel for many savers being provided by some challenger banks with better savings interest rates, often provided via innovative digital offerings. So how are they achieving growth and more importantly profitability when mainstream savings products such as ISAs and fixed-term saving accounts are offering minimal returns?
Good governance and regulatory compliance must remain a key focus for all financial institutions in order to trade profitably. At the same time, efforts to create excellent customer experiences are crucial to drive both satisfaction and ultimately, greater profitability. But is it actually possible to cost-effectively achieve both?
Financial institutions, particularly challengers, have realised that information - specifically how data insight is gathered and stored in a compliant manner - is the foundation of many savings service innovations. However, for established players the cost of hosting data services, the lack of connectivity between legacy systems and these internal data silos, has made it difficult to gather the insights needed to provide consumers with savings services that match their best digital experiences. This can lead to customer attrition as they look elsewhere for the best return on their savings and other incentives.
Indeed, market sentiment indicates there is a perceived lack of trust and value return for savers, particularly amongst the affluent millennials. This generation is gradually moving away from using traditional banking products with savers increasingly looking to alternatives and willing to take more risks to achieve greater returns, such as P2P lending. Financial institutions need to tap into this market with compelling digital propositions, specifically tailored and marketed for specific customer groups. The resulting niche products offer much greater returns on savings, yet ensuring their cost to serve customers is minimised at all times.
Whilst challengers are largely unburdened by the legacy of in-house systems through external cloud-based data hosting, the challenge of minimising hosting cost is still prevalent. In response to the squeeze on interest margins, a proven way for financial institutions to win a greater share of savings wallet and increase profitability is to provide trusted, efficient and compliant services driven by customer experience.
Fiserv has a long track record of enabling financial institutions with outsourced deposit taking services in a fully regulated environment. AgilitiTM from Fiserv also provides financial institutions with a wide range of regulatory compliant cloud-based banking services to allow efficient customer money management. Services are accessed by customers through a choice of digital channels - from web to mobile app, or through clients’ customer service centres.
Agiliti savings solutions provide a safe, secure and highly cost effective alternative to the traditional on-premise deployment and management of financial services technology. In parallel, financial institutions can focus on building the personalised and differentiated digital savings offerings required to capture a greater wallet share.
Chat with one of our Agiliti experts to hear how we deliver banking technology for the digital age.