The Ongoing Conflict
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 others are relentlessly pursuing consumer savings, while traditional banking behemoths are slow to respond in the face of eroding customer loyalty.
Competitive Savings Offerings
JP Morgan is an exception, using its fintech challenger Chase brand to boost its savings account rate. Meanwhile, Atom Bank, Zopa, Emma, Revolut, Starling Bank, Kroo, and others have made rapid moves into the savings market as central banks raise interest rates. Agricultural fintech bank Oxbury now offers the most competitive easy access savings account in the UK at 4.1 per cent.
Questions About Complacency
Fintech startups have launched an audacious assault on the traditional banking establishment. However, big banks have not fully embraced the challenge presented by fintech firms, raising questions about their motivations and perception of customer loyalty in this age of disruption. Their reticence to aggressively compete for consumer savings might stem from unwavering faith in the fidelity of their existing customer base.
The High Stakes
If banks fail to mount a robust response to the burgeoning fintech competition, they risk alienating customers who are increasingly enticed by the convenience and bespoke experiences offered by these nimble insurgents. As customer loyalty hangs in a precarious balance, banks confront the haunting spectre of not only losing their footing in the savings realm but also jeopardising their broader relationship with customers just when the market cycle turns and profitable lending and mortgages will skyrocket in demand.