Eurozone citizens deposited $47 billion into savings accounts in March

Top reasons global consumers adopt banking services from national players

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Eurozone citizens deposited €43 billion ($47 billion) into savings accounts in March 2020, according to a report by Deposit Solutions. The average monthly growth of the net deposit amount has remained relatively stable for the January 2019-March 2020 period; this is the eighth consecutive month that net deposits exceeded the €40 billion ($43.8 billion) mark.

French savers led the way with an additional €19 billion ($20 billion) deposited in March 2020 — a 1.2% increase from February. Spain and Italy also saw notable increases, with an additional €16.8 billion ($18.4 billion) and €10.1 billion ($11 billion) respectively deposited in March, signaling 1.5% and 1.2% increases from February.

The steady deposit growth over the last year hasn’t been affected by the economic slowdown or low interest rates, highlighting the deposit market’s resilience and increasing customer demand for savings products as a whole. Consumers are likely more wary of investments at the moment due to increased stock market volatility, leading many to put their money with less risky options, like high-yield savings accounts.

This trend of increased consumer interest in deposits has benefited savings platforms: Q1 2020 was a record-breaking quarter for Octopus Cash, which saw the average saving size increase 26% from £133,000 ($163,783) to £166,000 ($204,421) in March, while Raisin also outlined an increase in interest in its platform. This flight to safety is all the more notable considering the European Central Bank’s (ECB’s) historically low interest rates.

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This market resilience and consumer interest in savings platforms provides an opportunity for fintechs to drive revenue growth through bank partnerships. Although established savings marketplace providers such as Octopus Cash and Raisin have grown their partnership networks in recent years, they still don’t offer users the option to connect with the majority of banks through their platforms.

However, they have an opportunity to capitalize on the growing interest in their platforms by striking new partnerships with banks to feature on their platforms, driving revenue growth through fees and commissions in turn, while also offering their users a greater array of savings options. Alternatively, savings marketplaces could use this opportunity to offer their tech stack to banks — so that the latter can offer enhanced deposit services through their own platforms — to earn a new stream of income and enhance their visibility.

For instance, Raisin partnered with Commerzbank to offer the bank’s corporate clients fixed-term deposits from select bank partners through Raisin’s marketplace in 2019, and other fintechs could follow suit. This would likely be attractive to incumbent …read more

Source:: Business Insider – Finance

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