The future of savings and investments

scientists and test tubes

We’d all love to have a crystal ball; Be able to gaze into the future and see clearly what lies ahead.

Increasingly, though, it’s hard enough to keep up with the pace of change, let alone predict the future.

In his new book, How to Thrive in the Digital Age, Tom Chatfield suggests that:

“The impossible facts of our age are only just beginning….  The pace of these changes is another unprecedented thing.  Television and radio have been with us for over a century; print for more than 500 years.  Yet in just two decades, we have moved from the public opening-up of the internet to its connection to more than two billion people; and it has been just three decades between the launch of the first commercial cellular-phone system and the connection of more than five billion active accounts.”

This radical change in the way we live has caused massive upheaval.  The record industry has found itself competing with instantly downloadable tracks that have made the CD single virtually obsolete.  Books are quickly morphing into ‘virtual’ e-books whilst amazon dominates the sector and everything from groceries to cars can be ordered online and delivered at the touch of a button.

In short, the way we use technology has changed not only the products we use, it’s changed us as well.

Some call it being ‘wired for distraction’; others point to the ‘always connected’ society and worry about the impact on attention spans and personal relationships.  Whatever your view, it’s clear that we’ve become more short-termist in our thinking and more demanding when it comes to products and the choices we’ve made.

So, really it’s no surprise that they way products are designed and sold has changed too, is it?

Or has it?  What’s really surprising is that when it comes to the financial sector not that much has actually changed at all.  Yes, you can now get your bank balance via text or use the internet to check interest rates but those changes are just channels, different ways of finding out the same answer – which is that financial products are no longer meeting the needs of real people.

In a recent study by Weber Shandwick, 50% of respondents agreed with the statement that “many financial products currently available don’t fit their lifestyle or their individual need.”  Nearly four in five agreed that low interest rates make savings accounts a poor investment.

So, what needs to change?

Well, Weber Shandwick suggests the industry must “start from scratch with a completely new suite of products that will meet the needs of the short-termists.”

In fact, it’s not that easy.  Meeting the needs of today’s consumers means offering fast, flexible and transparent business loans that will help the economy grow – yet banks have to focus on rebuilding their capital bases.

Meeting the needs of today’s savers means offering higher returns, yet banks are struggling to return to profitability and money is scarce.

So whilst we do need to take a new look at what is the best investment and start offering savings and investments that yield a decent return rather than typical deposit accounts that pay barely more than inflation, it may not be the banks that are able to do it.

Meeting the needs of today’s society means giving some thought to collaboration; Providing ways for people to help each other out; Finding products that are good for all concerned rather than a winner takes all, zero sum game.

It’s hard to see how banks can deliver this change singlehandedly.  In reality, private sources of business funding, and peer to peer lenders like Funding Knight who can offer both competitive loans for business and higher interest savings accounts must step in to help solve the problem.

At FundingKnight we’re excited because we think it’s not just technology that’s changing, but the whole way we do business.  We think the days of ‘computer says no’ and poor value for money are starting to end, and we’re keen to accelerate the pace of change.

Learn more about how you can pool your funds with others to make your money work harder


Apply for flexible and transparent funding for business

Or simply stay in touch.  We’d love to keep you updated with progress.

Photo used under creative commons license

One thought on “The future of savings and investments

  1. Pingback: Peer to peer lending: Evolution and devolution | FundingKnight: The Blog

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