Research by Investec has found FinTechs use partnerships with larger financial services companies to offer market-leading savings products to their clients.
According to the research by Investec, by using their technology and the infrastructure of larger banks they partner with, FinTechs can offer some of the ‘most attractive savings account interest rates in the marketplace’.
Investec collected the information by reviewing the accounts of 57 companies in the FinTech sector. The research found that the average interest rate on instant access savings accounts from FinTechs was 0.28% AER, which was found to be in the top 20% of all easy access savings accounts in the market.
Furthermore, FinTech providers who were identified to offer savings accounts through a partnership had the most competitive rates in the market. As an example, UK FinTech Plum – whose savings product is provided by Investec – is able to pay 0.40% on easy access savings. This is the fourth most competitive rate open to UK savers looking for easy access, Investec claims.
The research also found that the top corresponding figure for notice accounts from FinTechs was 0.49% AER – a rate that is in the top 28% of accounts in the market. Meanwhile, fixed-rate savings deals from FinTechs were an average of 0.72% AER, which is in the top 39% of the market overall.
Investec head of funding partnerships David Hunt said, “FinTechs continue to revolutionise the retail financial services sector. With digital offerings and state of the art technology, combined with leveraging the infrastructure of larger banks, they are able to offer very attractive savings propositions whilst retaining control of their customer journey.”
Moneycomms personal finance researcher Andrew Hagger added, “Savings rates from the high street banks are close to zero, however the new digital FinTech banks offer a much more competitive alternative and still provide customers with security through FSCS protection.
“Many FinTechs are able offer attractive deals to savers because they are much leaner and don’t have the massive overheads of running and maintaining a network of high street branches.”
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