Press Releases

Save smarter and faster with open banking

31 October 2023
press release

As cost-of-living pressures mount and households feel the pinch, it’s more important than ever to identify ways to save money. The open banking revolution is making it easier, faster and smarter to save. With 34% of adults either having no savings, or less than £1000, in a savings account – open banking is finding ways to innovate and help mitigate mounting living costs.

In previous research, OBL found that 64% of consumers claimed that using open banking savings apps increased their total level of savings and helped them to develop a regular savings habit. With 11% of UK consumers and 17% of small businesses now using open banking, the UK is increasingly embracing this financial innovation to help boost their savings. It allows people to put money aside quickly and easily, either by using ‘round-ups’ on regular purchases, or apps that sweep surplus cash from current accounts to interest-earning saving accounts.

Open banking-powered investment apps have also brought wealth management services to a wider audience, by combining low fees with a low barrier to entry. With an up-to-date picture of an individual’s finances, these apps can deliver better deals, and more relevant products and services.

Open banking is also helping to boost savings by allowing consumers to open a savings account and deposit straight away, allowing them to start earning interest more quickly. This is in contrast to the several days it can traditionally take for deposits to reach an account.

Consumers want ease and convenience when managing their savings, which is why there is also increased demand for Variable Recurring Payments (VRPs) – a ‘smart payment’ that allows controlled sweeping between current and savings accounts, helping both consumers and businesses to save smarter.

One building society has recently partnered with an open banking platform to enable members to fund their savings account immediately after they’ve opened it. The building society estimates that about 8 per cent of accounts are closed each month as members forget to fund their accounts. This faster funding puts users on a good footing to start saving smarter from day one.

As the UK swiftly moves towards ‘open everything’, the many additional benefits and cost saving options open banking can provide will become even more apparent. Open finance has the ability to create innovative products, allowing consumers to maximise the interest they earn by keeping savings in situ. They can move the money to a current account when needed for regular payments such as mortgage, rent or other bills.

Henk Van Hulle, CEO, Open Banking Limited, said: “As we mark World Savings Day, we are proud of the benefits open banking providers offer to consumers, allowing them to save smarter and faster. Enabling the UK population to increase their financial resilience is a key driver of open banking.”

He added: “As we look beyond open banking, it is important that the Government proceeds at pace with the Digital Data Protection and Digital Information Bill which will fully unlock a revolution of smart data to other sectors such as energy, telecoms, and water.”