The Pursuit of Consumer Savings
In the ongoing fintech battleground between startups and big banks, cash savings have emerged as an unlikely, somewhat dull but important theatre of all-out conflict. Neobanks and other fintechs are relentlessly pursuing consumer savings. On the other hand, traditional banking behemoths have not fully embraced the challenge presented by fintech firms, continuing to prioritise other areas of their business rather than fiercely competing for consumer savings.
Not All Banks Shy Away
JP Morgan, one of the biggest banks in the world, has used its fintech challenger Chase brand to boost its savings account rate to 3.8% after the Bank of England ‘super-hike’ in response to startups like Atom Bank, Zopa, Emma, Revolut, Starling Bank, Kroo, and Oxbury joining the competition. Oxbury, an agricultural fintech bank, now has the most competitive easy access savings account in the UK at 4.1 per cent.
Complacency and Customer Loyalty
Traditional banks may not be aggressively competing for consumer savings due to their belief in unwavering customer loyalty. However, this complacency may backfire on them as fintech startups offer convenience and bespoke experiences to attract customers. Banks are at risk of losing their footing in the savings realm and jeopardising their broader relationship with customers if they fail to respond to the fintech competition.