The Daily Telegraph - Saturday - Money
PERSONAL ACCOUNT
Technology is about to transform forever the way we save cash
Imagine walking into your bank and telling the cashier you want to open a savings account. You would expect to be offered a small choice of terms and rates, and you’d guess that most of those rates would not be best in class.
What you would not expect is to be offered an enormous swathe of savings options including many accounts from other financial institutions and some exceptionally high rates. A Dutch bank, or a Swedish one?
Yes, these lenders want your sterling savings too, it seems, and in the near future you may be able to save with them – and get some fantastic rates – via accounts operated by your own existing banks.
Welcome to “open banking” – something that sounds like technology jargon but that, whatever words you use, is real and revolutionary. And about to arrive in Britain.
I confidently predict that it will change the way we save cash, and very quickly.
The British love cash. There is an inherent dislike or suspicion of shares and bonds (the latter, for instance, are hugely popular in Italy – not here) and by contrast we set great store by cash deposits. Many bewail this fact – and try endlessly to point out the erosion by inflation of cash – but in the end it is where most people are most comfortable.
No wonder, then, that technology, which has brought about incredible changes to the way in which we trade and own shares and other investments, is now finally turning to that hitherto untouched giant: the savings account.
Two services are due to open in Britain within the next 12 months.
The first, as yet unnamed, will be a website launched by Hamburg firm Deposit Solutions, based on the existing model already up and running in its home country. Called Zinspilot, it opened for business in late 2015 and in less than two years has attracted €2bn (£1.8bn) from German savers.
Their Zinspilot accounts are operated online like any bank account. But once signed up, savers can choose accounts from many banks from many countries (including, for instance, a British bank, Close Brothers, which is taking their euro deposits).
The benefits all round are clear. The underlying banks get access to savers’ funds without the hassle of having to service individual savers themselves. And the savers get excellent rates as a result of these cost reductions. Zinspilot takes a fraction of the interest as its fee.
It doesn’t stop there. Earlier this summer Deposit Solutions offered its service via Deutsche Bank, so that enormous institution’s customers can now lodge deposits with rival German and non-German banks too.
“Britain is the biggest savings market in Europe after Germany,”