How to build the best online Cash ISA user experience.
Apr 21, 2022
Summary:
- ISAs allow UK savers to put aside money tax-free up to an annual allowance, with different types such as Cash, Stocks & Shares, Innovative, Lifetime and Junior ISAs, each with their own rules.
- Demand for ISAs peaks before the 5 April tax-year deadline, making this period critical for smaller and mid-sized financial institutions that rely on these deposits to fund lending.
- As digital banking usage surges, customers expect a smooth Cash ISA experience with easy transfers, clear visibility of interest and contributions, and quick access to support via chatbots and call centres.
- Legacy banks must modernise their digital channels, embrace open banking and APIs, and build data-driven ecosystems to compete with agile neobanks offering hyper-personalised services.
- By partnering with Quantum Metric, retail banks can use session replay, behavioural analytics and real-time insights to remove friction, improve ISA journeys and reduce costly call centre interactions.
ISAs (individual savings accounts) are a great way to save money tax-free. According to data from HMRC, individuals paid £48.7 billion into their Cash ISAs in 2019/20, averaging just over £5,000 per person. UK residents can contribute up to £20,000 in the 2022/23 tax year, and the interest earned will be free of income tax. Now the question is , how can financial institutions build the best online Cash ISA user experience?
With each tax year ending on April 5th, March is often a busy time for finance companies, as people scramble to take last-minute advantage of tax-free savings. ISAs matter especially to smaller financial institutions – those counting on the month leading up to the deadline to fill their lending throughout the year.
How can these firms ensure the process of opening and maintaining a Cash ISA runs as smoothly as possible across their digital channels and call centres?
By offering best-in-class experiences and improving call centre customer service and metrics.
The intricacies of ISAs.
ISAs let you save money as a lump sum or via regular monthly payments. Allowances don’t accrue: if you don’t use your limit by April 5th, you start anew on April 6th.
The terms and conditions of each ISA depend on the provider.
Some banks offer a ‘flexible’ ISA, whereby you’re allowed to withdraw money and deposit it back in at a later date, without the replacement counting towards your allowance (assuming both transactions are done within the same tax year).
It’s also common for banks to offer a one-year fixed-rate or a higher rate to lock you in for longer.
There isn’t a limit regarding how many ISAs you can hold in total, and you can split your allowance across different types of ISA each tax year, of which there are several, but you can only open one of each category in the same year:
- Cash ISA
- Stocks & Shares ISA
- Innovative ISA
- Lifetime ISA (LISA)
- Junior ISA
Why do ISAs matter?
To make the most of tax-free savings, personal account holders with spare cash are keen to utilise their allowance each year. But that’s not the only benefit.
ISAs also feed into government incentives. For example, LISAs were created to help people save for their first home or retirement. They enable you to save up to £4,000 per tax year, with the government adding a 25% bonus on top (capped at £1,000).
Retail banks make money from people’s savings by lending a proportion out to customers as overdrafts, loans, mortgages and other products that generate interest. The difference between that interest and the interest paid out to ISA accounts is the net amount banks make.
Most recentlyThese days, people don’t tend to transfer their savings between banks (even though some ISAs do allow that), because interest rates are low and there’s little reason to move.
ISA customer experience.
In the run-up to April 5th each year, there’s a huge rise in impact on digital transfers and pressure on call centres. With traffic surging, banks need to be prepared to support the sudden influx of clients.
For financial institutions to keep pace, they must deliver a standout user experience (UX), ensuring transactions complete smoothly and calls are minimised. And when calls do occur, agents need tools to help them support clients as effectively as possible.
What do customers want from a Cash ISA user experience?
As the world has shifted to digital-first, more people than ever use online banking. According to Finder, an estimated 93% of the UK adult population will use some form of digital banking in 2022.
Meanwhile, research by UK Finance shows digital banking has accelerated since 2020, with the largest growth area being mobile apps. Because of these trends, the quality of the digital experience is now supremely important, with 81% stating it determines who they bank with.
In addition to user-friendliness, customers who manage their Cash ISAs online via an app ask themselves the following before choosing a provider:
- Can I transfer money in and out seamlessly?
- Is there a chatbot in case I need to ask questions but want to avoid calling?
- Is the contact number easy to find, if I do need to call?
- Are key details laid out such as interest rate and contributions to date/remaining?
Cash ISA user experience: how can legacy banks keep up?
As born-in-the-cloud neobanks like Revolut and Monzo continue to make strides, legacy banks need to keep up if they’re to stay competitive.
How?
By making their digital services as appealing and easy to use as possible, ensuring loyalty and attracting new customers.
As part of that, banks must get on board the open banking and application programming interfaces (APIs) train, giving them access to a wealth of valuable customer data and insights.
By working with specialist partners to build a digital ecosystem that harnesses the power of data, legacy banks can offer a personalised and frictionless customer experience across all channels.
Unless that happens, people will continue to gravitate towards neobanks that better satisfy their banking needs via hyper-personalised services. These tech-forward companies attract top talent and use lean and agile operating models, meaning they’re able to build customer-focused products quickly.
Why retail banks partner with Quantum Metric.
Quantum Metric’s pioneering session replay, behavioural metrics, anomaly detection, opportunity analysis and mobile analytics arm banks with the tools to understand how customers are using their products and services.
Our platform helps them:
- Empathise with their customers, driving better decision-making
- Quickly identify and fix friction points, minimising customers’ rage clicks
- Create a more streamlined, simple and intuitive customer experience
Moreover, our real-time metrics, co-browsing tools, quantitative customer insights and session replays reduce costly call centre interactions by:
- Helping agents understand what customers are seeing (and feeling)
- Reporting conversion and bounce rates to build a company-wide picture
- Detecting frustration and activating a live chat to divert people away from calling
- Highlighting when multiple customers have the same issue, helping teams prioritise
- Identifying conversion-blocking elements that need fixing urgently
- Pinpointing potential problems before they impact more users
By partnering with Quantum Metric, financial institutions arm themselves with valuable customer data and insights, helping them improve the user experience. Learn more about our customer-centric platform.