Changes to UK ISAs will be coming into play imminently in April 2024 including allowing consumers to pay into more than one ISA of the same type in the same tax year. This was a welcomed decision by retail investors, giving them more control and flexibility to make money on their savings.
For businesses offering savings pots, the recent ISA shakeup marks an opportunity to reach more prospective customers with their products. Yet, as Tink’s research demonstrates, investment platforms face fierce competition to retain their shrinking share of wallet, as consumers routinely dip into savings pots to cover essential costs.
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So, how can platforms set themselves apart? As we uncover through Tink’s latest retail investor trends, leveraging open banking to enhance user experiences may hold the answer.
A shift in investment attitudes
According to Tink’s research, which surveyed over 500 retail investors in the UK, Brits are still struggling with their cash flow due to the cost-of-living crisis. As a result, attitudes are shifting away from long-term ‘set and forget’ portfolios, as savers become more reliant on withdrawing from their investment pots to cover overheads.
For example, over half (51%) have cashed in some of their investments to help them through the cost-of-living crisis, while 42% of investors have also dipped into their investments to reduce mortgage borrowing, as interest rates sent mortgage rates to the highest levels in decades.
And new attitudes to investment look set to remain, as nearly one in five (19%) investors plan to divest their investments for cash in the next six months.
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By GlobalDataInvestors want more from their platform
Tink’s research demonstrates a clear appetite from retail investors for quicker and more convenient investing processes. Three quarters (74%) want to instantly transfer money without leaving the investment platform, with 18% considering switching platforms if this function was available elsewhere.
What’s more, the majority of retail investors have expressed concerns with their current investment experience, with many fretting they’d miss an investment opportunity due to clunky processes.
According to our latest research, two-thirds (66%) worry about losing money on an investment platform because it has taken too long to top up their account, and 70% cite being locked out of investments as a top concern.
The open banking business advantage
It’s clear investment platforms can’t afford to deliver friction-filled processes in today’s economic environment, with retail investors going as far as to say that they would part with more cash for an improved user experience.
According to our research, one in five retail investors would invest more if an investment platform had an easier or more instant onboarding process, while a similar number (18%) would be encouraged to invest more if an investment platform allowed them to make instant payments to their investment account.
By leveraging tech solutions such as open banking payments, platforms can not only offer a quicker and easier onboarding process with real-time account verification, but also allow users to move money in and out of their bank account quickly. Additionally, the process reduces the risk of fraud since the information is coming directly from the bank – boosting conversion rates and best placing platforms for financial and reputational success.
Against this backdrop of changing attitudes to investing, investment apps looking to retain share of wallet would do well to ensure current processes match up to the demands of today’s retail investors. Solutions such as open banking payments offer platforms the ability to provide best-in-class user experiences, putting them in good stead in building user loyalty and market share.
Andrew Boyajian is VP of Product for Payments & CX at Tink
