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Brits Emerge as Europe’s New Savings Champions

 

  • After record deposit inflows of GBP 81 billion in the first half of 2021, British savers have now propelled ahead of their counterparts in Germany.
  • Meanwhile, savers from the eurozone are now growing their bank balances at a slower pace than at the beginning of the Covid-19 pandemic.
  • The continued growth of deposits in Europe will increase demand for more product choice and transparency.

 

British savers put more money aside in their bank accounts during the first half of 2021 than they ever have in a single half-year, according to a new report from open banking pioneer Raisin DS. The report finds that an injection of GBP 81 billion in retail deposits over the first half of 2021 has now placed British savers ahead of their counterparts in the eurozone, where deposit inflows have fallen back to pre-pandemic levels after spiking in 2020.

In the UK, deposits have grown at an accelerated pace since the start of the Covid-19 pandemic, with savers increasing their bank balances by 17% between June 2020 and June 2021. More importantly, British savers have shown no signs of slowing down even after the easing of Covid-19 restriction in the country. In fact, deposit inflows in the UK increased by an extra 5% over the first half of 2021 compared to the same period in the previous year.

“Savers from the UK have been putting more and more money aside since the Covid-19 crisis began, and have now displaced their German counterparts as the biggest savers in Europe,” says Dr. Tamaz Georgadze, Co-CEO of Raisin DS. “However, British savers are in the same boat as their European neighbors, earning little to no interest on their savings. With inflation on the rise and the continent gradually opening up, people may find it more difficult to save as much as they did before. At the same time, we expect them to begin searching for ways to make their hard-earned money stretch the extra mile.”

In comparison to British savers, who grew their bank balances by nearly GBP 1237  each in the first half of 2021, savers from the euro-area only grew theirs by GBP 691 per capita in the same period. The report finds, however, that deposit inflows are spread out unequally in the region, with savers from Southern eurozone economies trailing behind Central European countries, as well as the regional average.

Out of the six largest economies in the euro-area, France was the only country to show a downward trend, with net inflows shrinking by 4% to 105 billion GBP compared to the beginning of 2021. However, per capita increases in the first half of the year were still higher than in Germany, the eurozone’s biggest deposit market.

“After experiencing the largest year-end inflows since the global financial crisis of 2008, deposits have returned to pre-pandemic levels in the euro-area. However, with net inflows of GBP 236 billion in the first half of 2021, it is clear that deposits continue to play an important role in the region,” adds Tamaz. “As savers from the eurozone continue to grow their savings in a negative-rate environment, we expect an increase in demand for secure and competitive interest-bearing products. At the same time, these savers are taking more control over their financial futures, thanks to open banking innovations that provide them with the choice and transparency they are hungry for. For banks in the region, it is therefore important  to see whether they would want to provide a solution for their customers themselves, or through third parties.”

Full analysis here:

Deposit Market Spotlight: H1-2021

 

About the analysis
All figures in the publication ‘2020 European Deposit Market Spotlight – Annual Report’ were calculated based on aggregated data from the European Central Bank, the Bank of England, the Federal Statistical Office, Eurostat and Barkow Consulting. The research examined the development of retail bank deposits in the Eurozone and the United Kingdom.

About Raisin DS

Raisin DS is a trailblazer for open banking in the deposits and investments space. The FinTech company provides an open banking infrastructure for the global $50+ trillion deposit market that benefits banks and savers alike. For savers, it means more product choice and decision power, customer-facing institutions like banks benefit from best-in-class savings marketplace solutions for their own customers, and deposit-taking banks receive better access to deposit funding. Raisin DS operates its own B2C platforms across Europe under the Raisin, WeltSparen, Savedo, and ZINSPILOT brands, and in the U.S. under the brand SaveBetter. In Germany, in addition to savings products for retail and corporate clients, the company also offers ETF-based investment and pension products. Raisin DS collaborates with around 400 banks and financial services providers from more than 30 countries. The company is servicing over 550,000 direct customers. Raisin DS is backed by renowned international investors such as btov Ventures, Deutsche Bank, FinLab, Goldman Sachs, Greycroft, Headline/e.ventures, Index Ventures, Kinnevik, Orange Digital Ventures, PayPal Ventures, Thrive Capital, Top Tier Capital Partners, Ribbit Capital, and Vitruvian Partners, as well as Peter Thiel. The company has offices in Berlin, Frankfurt, Hamburg, London, Madrid, Manchester, Milan, New York, Paris, and Zurich. Raisin DS was formed by a merger of the FinTech companies Deposit Solutions and Raisin in June 2021.

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