Banking apps boost savings

 
Tim Wallace
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BANK customers who use mobile apps and receive texts warning them when they are close to their overdraft move hundreds of pounds more into their savings accounts, the City watchdog said yesterday.

As well as saving money on overdraft charges – the costs they incur fall 24 per cent compared with people who do not use the mobile facilities – the customers are also more willing to keep less cash in the account.

In one of the bank’s studied by the Financial Conduct Authority, customers cut their current account balances by an average of £307.

“Consumers may intentionally keep high balances to protect themselves from incurring overdraft charges, especially if they find the cost of paying attention to their account to be high,” said the FCA report.

“These services reduce the time and effort needed to monitor balances, so consumers can keep a lower buffer in their account while continuing to avoid overdraft charges and earn interest on excess balances in accounts with higher credit interest rates.”