UK Savings Week 2024 has once again been an opportunity for the wider financial services sector to get everyone talking about the benefits of saving.

Whether it’s been TikToks providing tips on getting started or how people can save smarter by shopping around for the best savings rate, this has been a week to take stock and reassess.

Taking that same spirit of renewal and improvement, as part of UK Savings Week the BSA asked some of the firms working with UK building societies and credit unions where they thought the opportunities were for mutuals in terms of savings.

Building societies and credit unions are successfully helping individuals and communities to save and grow, day-in, day out.

Branches, passbooks and online services cater to the needs of millions of members, helping people grow as savers and support them through key milestones, from buying their first home and car, to retirement and later life.    

So, according to BSA associate members, Vilja Solutions, Mutual Vision Technology, Monument Technology, Finova, OneFamily and KPMG, what should the sector be focussed on as it looks to the future?

Making saving money, as easy as spending it

Unsurprisingly, digitisation was one of the key suggestions from technology firms Vilja Solutions and Mutual Vision Technology.
 
Peter Back, UK Director at Vilja, says that ease of access should be a key priority, making it easy to save money whenever you want and through any channel you choose.

"Savings are a crucial part of financial well-being and a top priority for a healthy community,” he says. “We believe it should be just as easy and accessible to save money as it is to spend.”

There was a similar suggestion from Tim Bowen, CEO of Mutual Vision, who argues that building societies and other mutuals are inherently what younger consumers look for in the institutions they trust. However, he adds, this new generation of consumers also expects to be able to interact and transact almost exclusively through digital channels.

“This is where the opportunity for mutuals sits in realising their potential for growth by offering solutions that will allow younger savers as well as borrowers, to confidently choose mutuals over other larger institutions.”

Less fuss, more speed

In addition to providing digital services, the speed of signing up new members, in particular reducing friction in the onboarding process is something pointed out by tech firms Finova and Monument Technology.

Both firms argue that using digital tools to take the hassle out of potential customers signing up and becoming members needs to be a key priority.

Chris Little, chief revenue officer at Finova, says he recently abandoned an online onboarding process when it became clear some manual processes would be required.

“A digital onboarding process can improve engagement and increase uptake, ensuring customers can set up a savings account without fuss,” he says.

He points to tools like electronic and digital IDs to reduce the hassle factor for onboarding and connect savings accounts to current accounts via Open Banking to improve the savings process. “Our industry has been slow to adopt technology, and this must change.”

Steve Britain, CEO of Monument Technology, also argues that for savers and societies alike, speed and agility are essential. While excellent service is in the DNA of building societies, he advises societies to be super agile to deliver great experiences.

“Many societies are simply not geared up to support ‘digital’ onboarding for tech savvy savers, and to control the shop window in an instant,” he says.

The benefits of saving early

Doubling down on the sector’s strong track record on financial education and intergenerational support is another area highlighted by KPMG’s partner and head of building societies Peter Westlake.

Given the community role the sector already plays, he sees major benefits for the sector in focusing attention on getting people saving early and understanding the financial benefits through all life’s key stages.

“Educating members on the benefits of starting to save early on and the impact of compound interest, combined with the right strategy, products, services and engagement channels, creates a unique opportunity that can benefit individuals, building societies and society as a whole,” he says.

Finally, in the short term, helping to calibrate some of the Government levers to support younger savers buy their first home is another area highlighted by Paul Bridgwater, head of strategy and investment Proposition at OneFamily.

The firm’s own research suggests the 25% penalty for early withdrawal from a Lifetime ISA (LISA) is putting off first-time buyers from using a product that’s designed to help them.

“Currently they’d not only lose the 25% bonus that they’ve accrued, but also 6.25% of their savings too – which feels unfair,” he says. “If the penalty could be reduced to 20% then I think we’d see more young people using it.”

You can find out more about the aims of the UK Savings Week campaign and how building societies and credit are the driving force behind it here