Author: David Webber
Nearly half of young people don’t have a savings account or ISA. Banking apps and predictive technology can banks help customers to save.
In his recent Budget, Chancellor George Osborne outlined measures to support savers at every stage of their lives. This is well timed, as according to the Lloyds Bank’s saving index, the appetite to save is generally increasing, with more than two thirds of people saying they now save regularly.
However, according to our recent research this is not the case for young people, as almost half of 18 – 30 year olds in the UK, equivalent to 5.4 million young people do not have a savings account or ISA. However, over half of them have money left in their current account at the end of the month. So what can banks do to help their younger customers save more?
Predictive technology can make saving easier for young people
Firstly, the advent of predictive technology is providing a key opportunity for financial services providers. As systems such as Apple’s Siri and Microsoft’s Cortana become an increasingly important aspect of consumers’ lives, now is the time for banks to capitalise on these types of intelligent processing power to help their younger customers save.
For example, providers can use analytics to automatically transfer surplus amounts into a savings account or ISA. They could even predict large impending payments and ensure the account holder is prepared for these. According to our recent research, 75% of banking customers would like to see such a system introduced.
Digital banking apps help savers visualise the end goal
In addition, adding personalised savings goals features to digital banking apps would also encourage customers to save more. Consumers are more likely to save if they can readily visualise the outcome. By personalising a savings aim and setting it over an achievable timescale, goals become more realistic. It is more compelling to save for the next ski trip or new kitchen as a separate goal rather than have it lumped into a single account.
It’s great that the Government has committed to helping savers. However, the next step is for providers themselves to ensure they are encouraging their customers, especially younger ones, to save.
By implementing predictive services as well as personalised savings goals, banks can ensure they are giving their customers the support they need.