The news: UK-based Nationwide Building Society’s new open banking service lets customers sweep money into a new current account from their previous current account provider, per a press release.
More on the service: Open banking provider Moneyhub’s payment initiation service handles this feature. When a customer opens their account, they can connect with their previous current account at another financial institution and immediately sweep the money into the new account at Nationwide.
- Under the old, pre-open-banking process, it would take several days for the account to be completely active and funded.
- New customers often forgot to transfer the money to their new accounts, which resulted in 8% of new accounts closing each month due to lack of funding, according to Nationwide.
- The feature will initially be available for fixed-rate online bonds, but will expand to other savings products in the future.
Nationwide took a minority stake in Moneyhub in November 2018 and the two companies collaborated to develop the payment initiation service.
New account funding: Research for our US Account Opening Benchmark found that funding a new account is top of mind for customers. They’re looking for ease and efficiency in this process.
- 40% of new account openers said the ability to fund the account via direct deposit is “extremely valuable.”
- 30% said funding a new account with a payment app is “extremely valuable.”
The lack of US open banking regulations makes the account-switching process difficult, but our research shows that customers crave a digital solution. The clunky existing process often leads to frustration and dissatisfaction.