With Open Banking phase two fast approaching in January 2018, Giles Hutson, CEO of Insignis Cash, explains how the new competitive banking environment can boost saver’s returns on cash.
“UK Savers, corporates and charities are sitting on more than £1.5 trillion of inert cash, with £700 billion of savings held by individual customers alone*. Improving returns on these extraordinary amounts of money by even 1% would release £15 billion back to savers and ultimately the UK economy. The blockage to this massive benefit is the tedious process of moving accounts coupled with confusing and ever changing products from the banking sector.
“The good news is that every day there is increasing competition for these deposits as new banks enter the market. People need to be able to compare returns available on different accounts so they can make the best choice to protect and grow their cash. Open Banking will help spark a stronger culture of account switching. The enhanced competition driven by greater transparency in the banking industry will enable people to clearly assess their options and make more informed decisions regarding their cash deposits.
“Access by approved third parties to more consumer data will also ramp up opportunities to create products and services targeted at sections of the market whose financial needs are not currently being met. It’s likely we’ll see a more specialist or niche banking market open up with more diversification as these third parties hone in on gaps in the market. If industry players jump on the competitive bandwagon, the UK savings market may well get the boost it needs.”