There once was a time when, if we wanted to open a new current or savings account, the first port of call would be a bank or building society. How times have changed. A bank account with Sainsbury’s supermarket, saving money for your utility bills in an e-wallet by Octopus Energy and depositing money in
UK Savings Week 2025
Author: Kevin Phillips
Generation Z and following them, Generation Alpha don’t think about money in the same way their parents do. They also have a much wider range of options, coupled with a new set of pressures upon them as they navigate their financial life. Why then should we assume the old way of borrowing and saving will work for them?
With higher bills, costs continuing to rise above increases in income and no clear end in sight we might believe we are justified to think the Gen-Z’ers should be ruled out as customers for financial services who provide deposit accounts. Whilst their parents and grandparents were encouraged to save up for the future, there doesn’t seem to be a plan to market nor offer any encouragement to younger consumers to save.
Why? Because the industry is still focusing on lump sum, fixed term deposits or regular savings stashed away on a monthly basis. There is little appetite for ad-hoc, smaller, more volatile deposits with the fear that funds just come and go quickly, making it harder to predict the loan-to-deposit ratios. The problem is, if banks, building societies and credit unions carry on like this they are heading downhill with declining deposits as the numbers of their older customers simply dwindle and diminish. Making hay now and hoping for a miracle in the future to change the situation seems to be the only strategy for many.
The answer is to attract younger generations who don’t have significant discretionary cash at their disposal by creating personalized content, aimed at their circumstances and values, through a digital engagement that is most likely to encourage them to start savings. This personalization must be targeted, relevant and delivered just at the right time. Over time, these savers will see small regular or ad-hoc amounts squirrelled away will grow into balances worth hanging on to. Gen-Z and following them Gen-Alpha are looking for answers. Providers who offer simple and easy ways to save small amounts will prove to consumers it is worth hanging on to money rather than ordering take-out, having a range of digital streaming subscriptions or even buying that extra coffee.
Reimagining Deposit Accounts Through Personalization
First, it’s about marketing the right products and messaging that resonate. Younger savers trying to balance their finances are not going to lock their money away, even for shorter periods of time, if they are concerned about volatile retail price rises. They are also not going to bother if the return is so small they don’t see the value. New, tailored products will be needed – something that sits between instant access and notice accounts with a touch of a regular saver. Sure, the rates won’t be as attractive as more stable accounts, but with the amounts we’re talking about, it’s not really about high return, it’s about starting small and growing.
Personalized experiences help to improve customer engagement. Younger savers will respond better if they can tailor their savings according to circumstance. For some, saving once a week will work (put £35 away rather than go out on the town) while for others, daily is a much better bet (ditch the coffee and croissant and save £5 instead). Mix and match might be the suitable approach for others, and for some, saving as and when they feel they can will work the best.
To make this happen, customers should be able to easily set up goals and a schedule that is right for them. By working out the best time to nudge the customer, personalization will help train customers to save rather than spend disposable income. To help motivate customers, they should be given instant feedback in the form of a quick update on their savings progress. They should also be given options and rewards. Proactively tell the customer how much they’ve saved already and predict how much more they will have in a few months. Rewards can work too. A bonus percent here and there on small balances that can be locked away doesn’t give that much but still feels valuable.
Conclusion
In short, personalization can unlock the future for banks, building societies and credit unions looking to attract younger generations of deposit account holders. By giving them reasons to habitually save small amounts and grow their money, over time the loyalty will build up and the desire to deposit just a bit more here and there will flourish. Younger generations will learn to save, just in different ways to their parents. In time we will become a nation of savers again.
