Savanta - Business deposits, a new opportunity for GB businesses?

Business Deposits
A new opportunity for GB businesses?
savanta.com
1

Are businesses taking
action following
interest rate increases?
Since December 2021, the Bank of England has been
steadily increasing interest rates, elevating the base rate
from 0.25% to 5.25% in August 2023.
With rates at their highest since 2007, banks have responded
by offering new savings products and/or higher interest
rates to businesses, many of whom did not exist last time
rates were so high.
So, in the face of high inflation and a cost- of- living crisis, the
question arises: have interest rate movements had any
effect on how businesses use savings accounts?
What factors might encourage businesses to open a new
savings account? Data from Savanta’s MarketVue Business
Banking survey will answer these questions.
savanta.com
2

Despite rising interest
rates, the use of deposit
products remains
relatively stable
In a time of rising interest rates, one might expect businesses
to change how they handle savings and deposit accounts, but
habits remain relatively stable.
Savanta’s MarketVue Business Banking data has been
tracking product usage for over a decade and there has been
no significant movement in the usage of instant access and
term deposit accounts in the last 2 years, despite rising interest
rates.
The usage of instant access deposit accounts has only seen a
modest increase of 3 percentage points since Q1 2022 (36% to
39%), while term deposit usage appears to be stable at 6%.
Product held for your business in the past 12 months from any provider
38% 37% 37% 37% 37% 37%
39% 40%
36% 36% 36% 36% 36% 36%
38% 39%
6% 6% 6% 5% 5% 5% 5% 6%
Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023
(4317) (4355) (4267) (4327) (4427) (4296) (4202) (4082)
Instant Access Term Deposit Any business Deposit
savanta.com
MVBB: SU EST £0-1bn YE GB
3

GB businesses show
caution: few open or boost
savings, while many steer
clear or even pull back.
37%
Effect of interest rate increases to businesses’
savings accounts
In Q4 2023, we asked GB businesses with a turnover of £0-1 billion
about the effect recent increases in interest rates have had on their
usage of business savings accounts over the past year.
21%
18%
Only 5% of GB businesses have opened a new business savings
account, and just 8% have increased their savings account deposits.
The majority, almost 4 in 10 (37%), have continued saving roughly the
same amount as before.
10%
8%
5%
Notably, over 1 in 5 (21%) of businesses have not used a savings
account as not currently interested in doing so and one in ten (10%)
have even reduced the amount of money they deposit into their savings
accounts.
Continued to
save roughly
the same
amount as
before
Not used a
savings
account as not
currently
interested in
doing so
Done nothing
as you don't
have funds
available to
save
Reduced the
amount of
money paid into
savings
accounts for
other reasons
Increased the
amount of
money paid into
savings
accounts
Opened a new
business
savings
account
Just under 1 in 5 (18%) of businesses have done nothing as they don't
have available funds to save, hinting at potential financial constraints or
other priorities, particularly in a period of rising costs.
savanta.com
MVBB: Q4 2023 (SU EST £0-1bn GB). Base: 2585
4

Start-ups are most likely to have done
nothing or not used a savings account.
Higher turnover businesses are more
likely to have opened a new business
savings account or increased the
amount paid in.
Businesses with higher turnover (£2m-1bn) are more likely to open
a new business savings account (13%) compared to start-ups and
smaller businesses (£0-2m) with only 9% and 4%, respectively.
These larger businesses also tend to have increased the amount paid
into savings accounts (15%) compared to 9% for start-ups and 8% for
£0-2m businesses.
All business types have a sizeable proportion who continued to save
roughly the same amount as before, highest for £2m-1bn (40%) and
£0-2m (39%).
The lack of funds available to save is high for start-ups (25%) as we
would expect. Lack of funds is less prevalent for £0-2m businesses
(17%) and larger businesses (12%). Also, a sizable proportion of startup
(25%) and £0-2m businesses (20%) are not currently interested in
using a savings account. This is less common among businesses
with £2m-1bn turnover (16%).
savanta.com
9% 9%
8%
4%
13%
Opened a new
business
savings account
15%
Increased the
amount of
money paid into
savings
accounts
24%
40%
39%
Continued to
save roughly the
same amount
as before
MVBB: Q4 2023 (SU EST £0-1bn GB)
Effect of interest rate increases to businesses’
savings accounts
8%
11%
7%
Reduced the
amount of
money paid into
savings
accounts for
other reasons
25% 25%
17%
12%
Done nothing as
you don't have
funds available
to save
Start-ups £0-2m £2m-1bn
(97) (1850) (638)
20%
16%
Not used a
savings account
as not currently
interested in
doing so
3%
2%
1%
Don't know
(DNRO)
5

When it comes to business
savings accounts, financial shifts,
attractive interest rates, and
expert advice drive decisions,
while fresh features and rewards
take a backseat.
49%
Factors that might encourage businesses to open a new business
savings account
47%
38% 37%
28% 28%
18%
16%
We also asked GB businesses with a turnover of £0-1
billion that haven’t opened a new savings account,
what factors might encourage them to do so.
A change to
the
business's
financial
situation
A high or
better
interest rate
Advice from
an
accountant
or financial
advisor
Easy access
to savings
with no
penalties
A new
product
offering with
appealing
features
Reward
scheme or
account
opening
incentive
Advice from
bank
Nothing
savanta.com
Overall, the key factors that may encourage them to open a new account include
a change in the business’s financial situation (49%), a higher or more
competitive interest rate (47%), advice from an accountant or financial advisor
(38%) and easy access to savings with no penalties (37%).
A new product offering with appealing features, or a reward scheme or account
opening incentive are still important in motivating businesses to open a new
savings account, but at lower levels (28%) and just under 1 in 5 say advice from
their bank would encourage them. Interestingly, 16% of businesses say there is
nothing to persuade them.
MVBB: Q4 2023 (S U EST £0-1bn GB). Base: 1978
6

For start-ups, a change in finances
would encourage them to open a savings
account. For large businesses, interest
rates would have a bigger influence.
Almost 6 in 10 start-ups (57%) said a change in their financial
situation would encourage them to open a new business savings
account, followed by a higher or better interest rate (46%), and advice
from an accountant or financial advisor (43%).
For businesses with turnover of £0-2m, a change in their financial
situation and a higher or better interest rate were the joint top factors
(both at 47%).
22%
18%
17%
Factors that might encourage businesses to open a new
business savings account
43%
37%
32%
57%
49%
47% 47%
46%
53%
41%
37%
40%
32%
28%
32%
34%
27%
25%
16% 16% 16%
Over half of £2m-1bn businesses (53%) said a higher or better
interest rate would encourage them, with a change in their financial
situation (49%), and easy access to savings with no penalties (40%)
as the next two key factors.
Advice from
bank
Advice from
an accountant
or financial
advisor
A change to
the business's
financial
situation
A high or
better interest
rate
Easy access
to savings
with no
penalties
A new product
offering with
appealing
features
Reward
scheme or
account
opening
incentive
Nothing
SU £0-2m £2m-1bn
(62) (1438) (478)
savanta.com
MVBB: Q4 2023 (SU EST £0-1bn GB)
7

Businesses deposits in
uncertain times: an
opportunity for banks
Despite the current climate of rising interest rates, businesses appear to
be maintaining their financial investment pattern. A mere 2% increase in
usage of business deposit products was observed from Q1 2022 to Q4
2023, while only 5% of businesses opened a new account and 8%
increased their savings in the past year.
The challenging UK economy, marked by high inflation rates and
recession, seems to be constraining businesses’ ability to save more.
However, almost half (49%) would consider opening a new savings
account when there is a change in their financial situation.
Businesses identified higher interest rates and expert advice as key
motivators to opening a new business deposit savings account. Banks
could potentially harness this opportunity by offering more competitive
interest rates or giving businesses more support and guidance regarding
the benefits of the savings products that they offer.
Learn More
“Overall, rising interest
rates represent a
massive opportunity
for those banks who
can act swiftly and
offer products that
appeal to an audience
who have limited
experience in this area”
Philippa Whitham: Senior Director, Financial Services at Savanta
savanta.com
8

Savanta's MarketVue
Business Banking
Based on a continuous survey of 15,000 financial decision
makers in UK businesses and 10 years of historical data,
MarketVue Business Banking is a highly reliable and detailed
monitor of how banks are perceived by business customers.
It is designed as a complete market overview covering market
share, trends, brand health and customer experience to inform
business strategy and provide tactical feedback for action
planning. Interviewing is conducted continuously among a UK
representative sample from start-ups, SMEs up to major
corporates throughout the year and data/insight is delivered to
clients on a quarterly basis.
Find out more
Savanta is a fast-growing data, market research and advisory
company. With five global offices and 500+ staff, we inform and
inspire our clients through powerful data, empowering
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9

Team
Stephen Palmer
EVP, Financial Services
Stephen has 25 years' research experience across
financial services and tech and leads the financial
services team at Savanta. Prior to Savanta, Stephen was
Head of Insight at Kantar Financial Services & Technology
and responsible for delivering customer experience, brand
and segmentation research. Stephen is a certified
member of the MRS and has sat on the standards board.
stephen.palmer@savanta.com
Ben MacGregor
Director, Client Services
Ben has spent the last 25 years working in financial
services, providing targeted support to some of the most
recognisable global brands across banking, insurance,
payments, wealth, and investment banking. Recently that
has included support across the ESG journey – from
strategies to reach Net Zero to corporate reputation
work. Ben moved to Savanta at the end of 2021 to
support the growth of the financial services business.
ben.macgregor@savanta.com
Rima Aryandani
Associate Director, Financial Services
Rima has years of experience in research; works
predominantly on quantitative projects in the finance and
wealth space and has particular expertise in project
logistics. Rima joined the MarketVue Business Banking
team in March 2021.
rima.aryandani@savanta.com
Shweta Bharati
Senior Executive, Financial Services
Shweta joined Savanta with 8 years of experience working
in Market Research across all industry sectors. She
previously worked for Dynata's India Operation; mainly
specialising in quantitative projects. She has a BSc
(Hons) degree from Patna University in Biotechnology
and a Masters in Business Management from JRE
College of Institutions.
shweta.bharati@savanta.com
Philippa Whitham
Senior Director, Financial Services
Philippa has more than 20 years' research experience
gained agency side and has worked in the MarketVue
Business Banking team since 2014. Philippa has
considerable experience in managing large, complex
continuous research programmes, with particular expertise
in customer satisfaction.
philippa,whitham@savanta.com
savanta.com
10

etter.decisions@savanta.com
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