The power of open banking for Savings & Investments

For a business where speed really matters, open banking is a true power-up. Here’s how smarter payments makes a real difference in the Savings & Investment sector.

For customers looking to invest, time is money. While the mantra “time in the market beats timing the market” encourages slow and measured investing, customers are still interested in quick deposits and withdrawals. Waiting 2 to 5 business days for a deposit to settle into an investment account for some investors isn’t an option. It also creates tension and reluctance to invest larger amounts of money – customers will go where they have reassurance that their money is easily accessible.

In this article, we outline why Trustly can be such a power-up for savings and investments companies and why Trustly is the choice for some of the biggest players in the industry.

What is open banking?

Open banking is a financial practice that uses APIs to bridge the gap between consumers and banks. In simple terms, it allows customers to safely grant third-party access to their bank information, which then opens up a world of opportunities.

Customers can pay, deposit and withdraw without directly using their card – instead of approving a licensed third-party such as Trustly to connect to their bank.

This is where Trustly fits into savings and investments companies. We connect over 9,000 merchants with more than 12,000 banks worldwide, and we have a consumer reach of over 650 million. In 2023, we powered over $58 billion in total payments volume.

Customers often have to enter multiple numbers, go through lengthy forms and wait while information is processed. All of this creates friction in the customer journey, which ultimately leads to abandonment.

Trustly removes this friction and creates a smooth process for the customer. Businesses can also be assured of the security and privacy of their consumers’ data.

Open banking also has a benefit for the wider market. The sharing of data means that middle men can be cut out, which further increases the security and streamlining of customers’ data. Payments overall will become faster and more efficient.

Challenges facing savings & investments companies

Savings and investment companies face a number of challenges when it comes to payments and building trust with their customer base.

These issues can cause customer drop off, and ultimately reduce business profits as customers either go elsewhere with their savings, or choose to invest much more conservative amounts.

Onboarding & KYC

Onboarding and KYC processes for both customers and businesses can be complicated. Customers must go through lengthy approval processes before they are able to make their first deposit.

Friction in deposits & withdrawals

Deposits and withdrawals can sometimes take 2 to 5 business days, which will increase drop off.  It could even push customers towards other savings and investments companies who are able to offer such quick deposit and withdrawal options.

Difficulties with high-value transactions

With all this friction combined, customers are less inclined to make high-value transactions. Anxiety about withdrawal times and complications will mean customers will not be willing to put in significant amounts of their investment capital.

Even if there is trust and willingness, some customers will still be unable to make the high-value transactions that they desire. Many payment methods will struggle with capped amounts, particularly with cards and mobile pay.

Trustly’s account-to-account solution

Trustly provides a remedy to all these pain points. Account-to-account (A2A) transfers via Open banking are a huge benefit to savings and investments companies and we already work with notable clients in this space such as NS&I, Hargreaves Lansdown and Avanza.

Trustly’s A2A solutions mean that onboarding flows and KYC can be streamlined, and customers can be assured of swift deposit and withdrawal methods.

Trustly allows clients to make payments directly into any bank account without using cards. These transactions can also be authorised by the customer’s preferred method, further building trust. This is a solution we have implemented with many clients, including Hargreaves Lansdown.

We can also integrate account creation and KYC with a customer’s first deposit – all in one process.

Onboarding

With Trustly, customers can create their accounts and deposit in one flow, meaning that there is no need to wait for processing times for deposits or account approval. In short, customers can start investing straight away.

Smoothing out the process in this way means that customer acquisition can be increased. New customers are no longer turned away by a time-consuming introduction to your company and products.

KYC

Trustly also combines KYC into a single convenient flow, which is a large friction point for customers. Customers can be assured that they will enter one flow, and by the end, be completely set up with your product to start investing.

This includes validating identity, bank account details and financial history. All of these processes are completed with zero intrusion or delay.

Instant deposits & withdrawals  

Customers are often turned away by poor waiting times for deposits and withdrawals. With Trustly, customers can benefit from quick transactions, which overall makes them more likely to hold their money as they feel more in control.

Trustly’s Instant Payout Product means that customers can receive payouts in any European currency 24/7 within a matter of seconds. They can benefit from instant settlements (both pay-ins and pay-outs) across 33 markets with zero fees on exchange rates.

This increased trust means that time in the market is a far more likely occurrence, as customers will be reassured of the instant payouts if they need the money.

Enabling high-value transactions  

High-value transactions are an important part of any savings and investments company, as ideally you want customers to be investing and trusting a large part of their capital in your products.

Trustly helps to accommodate these transactions and build trust in customers, so they not only choose to invest larger amounts, but also feel less inclined to withdraw “just in case”.

For example, our A2A transfers are secure enough to process high values, often in the range of  €10-100k depending on the account holder's bank. These transfers act like a bank transfer too, so are quick as well as secure.

Opportunities for growth

Trustly provides a framework on which companies can extend their products and services. Open banking means that savings and investments companies can have an insight on each customer. Plus, with the increased satisfaction from Trustly, consumers are more likely to try new products.

Some opportunities for open banking could include:

• Account aggregation
• Budget automation
• Facilitating savings plans
• A2A payments
• Personalised financial advice

Trustly’s product capabilities are well aligned with savings and investments companies, and as more people begin to invest and increase their financial literacy, your company can join this growth.

Conclusion

Trustly integrates seamlessly with savings and investments companies, as we have demonstrated with some of the biggest names in the industry. Our solutions create streamlined business processes that build customer trust and increase retention, which for savings and investments companies can transform the business and be hugely profitable.

If you’d like to know more about how Trustly’s open banking can help you, then you can find out more about our frictionless financial services on our website.

If you’d like to implement Trustly into your business, then speak to our sales team today.

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