Keeping up in an aggregator’s world: How lenders can stay relevant in a shifting market landscape

Technology is always marching onward, and the savings sector is no exception to the rule. Over the past five years, new savings tools and platforms have spread like wildfire, each aiming to connect savings providers with better infrastructure. But the emergence of aggregators and savings platforms has added another layer of complexity, one that we cannot afford to ignore. Yes, these new platforms have heralded a new era of expanded choices, but at the same time, they also present a unique set of opportunities and challenges for banks and building societies that don’t have the right digital tools to join these platforms.

Understanding aggregators

In the past, the savings model was straightforward, simple, and clear. Providers offered their products directly to consumers and slowly added other tech capabilities to streamline the process. This typically involved launching a mobile banking app to help customers set savings goals, or creating dynamic dashboards that allow providers to analyse real-time data to improve the customer experience.

However, the market today is starting to look very different. Up and coming aggregators – like Raisin and Hargreaves Lansdown Active Savings – are disrupting the status quo. Savings providers have no choice but to upgrade their tech if they want to stay agile and still share their products and rates with third parties.

So, what sets these aggregators apart, and what benefits do they offer savers? In short, these platforms act as intermediaries, offering a centralised hub for savers to access a variety of savings accounts from different providers.

Let’s break down an example. Hargreaves Lansdown's Active Savings platform enables savers to conveniently manage cash ISAs, alongside other savings accounts provided by a range of providers, under one easy to use system. This is not only a boon for convenience; the added benefit of managing a cash ISA provides a one-stop shop for those who want the best rate while also taking advantage of the tax wrapper.

The risk of lagging behind

The big draw for savers is obvious. Having just one account means they avoid the admin hassle of switching. However, the integration challenge poses a significant technological hurdle for some savings providers. Without the necessary technology infrastructure – think a smooth onboarding process - banks and building societies simply will lack the agility to share their products on the platforms. Worse still, their customers will not be able to seamlessly open accounts, and this is the most important factor of all.

Everyday people now expect, and experience, seamless digital transactions that are easy as making a contactless payment. As such, it follows that borrowers will expect a similarly frictionless customer service experience from their lender. Those banks that still depend on outdated, paper-based processes could lose a golden opportunity to expand their customer base, and it not only limits their reach but also undermines their competitiveness in a saturated market.

The long-term ripple effects of a slow onboarding process go far beyond missed opportunities for collaboration with aggregators. Providers may resort to alternative strategies to entice customers, such as offering higher interest rates or sacrificing margins, further compromising profitability in the absence of streamlined and digital-first operations.

Embracing innovation in the era of digital savings

We must accept the future: aggregators will introduce significant changes to the savings ecosystem, and their proliferation will be driven by high market demand. In this case, a demand for simplified ‘all-in-one’ solutions. As savers move towards platforms offering convenience and optimal returns, providers must invest, and then invest a little more into technology to remain competitive. It’s undeniable that these new disrupters present a sort of evolutionary crossroads, one that is rife with both challenges and opportunities for providers. But lenders must accept a simple truth: it is only by embracing innovation and adapting to changing consumer needs that will they navigate this new terrain successfully and unlock the full potential of the digital savings landscape.