Big tech partnerships: Introducing the new high-yield Apple savings account

By Tara McKenna

5 mins

Big tech partnerships: Introducing the new high-yield Apple savings account

By Tara McKenna

5 mins

Apple is making waves in the financial services space this week with the launch of their new savings account in partnership with Goldman Sachs. The new savings account is only available to Apple Card holders in the US, who will be able to benefit from an annual interest rate of 4.15%. This enticing rate is more than 10 times the US national average of 0.37%. For context, The Apple savings rate outstrips American Express (3.75%) and even Goldman Sach’s standalone savings account (3.9%).


Apple’s savings account launch in the US is an interesting move it shows Apple’s willingness to make partnerships with traditional financial institutions. In order to cement itself more firmly in the financial services space. Apple has been steadily adding more financial services products to its repertoire since the launch of Apple Pay in 2014 and Apple Card in 2019. The Apple savings account is just the latest iteration of these efforts as Apple moves beyond payments and into banking. 


The race for customer deposits


Competition has been growing among banks for customer deposits recently. Since March last year when interest rates started being lifted, customers have pulled about $800bn in deposits from US commercial banks. More established banks are facing increasing pressure to offer better savings rates for depositors to stop them from moving funds to higher-yield products.


Increasingly, regional and small banks are competing for deposits by dangling promotions, including higher rates and cash bonuses for new accounts. However, this is quite a short-termist approach. What Apple are doing is more long term. By listening to what is going on in the market and what their customers need, then delivering on it with award-winning customer experience. 


It’s all about the experience


Although Apple is not shying away from the higher rates acquisition tactic, they do set themselves apart from traditional financial institutions with their seamless user experience and customer-centric product offering. 


By launching this new savings account, Apple’s goal is to help customers live healthier financial lives. The customer centricity of this new proposition is evident in the flexibility that it offers to customers. The new savings account is only available to Apple Card users in the US. However, it offers no fees, no minimum balance requirements, no minimum deposits and it has no requirement to lock away funds for set periods. This makes saving both easy and accessible.


In addition, Apple’s new savings account automatically deposits ‘Daily Cash’ rewards from the Apple Card into the savings account. And in case that isn’t good enough, the savings account can be set up through Apple Wallet. In just a few taps and the easy-to-use dashboard lets you add and withdraw money whenever you want. Through this experience, customers can utilise a frictionless service that actively helps them to drive more value from their money.


Big tech and incumbent bank partnerships


But Apple isn’t doing all of this alone. By partnering with Goldman Sachs, Apple is able to leverage Goldman to power these financial services. As a result, Apple can stick their brand on the product, take the high-margin cut and offload underlying responsibility to Goldman.  But the key question here is: What does Goldman have to gain from all of this?


Goldman has had their share of bad press lately and their online consumer banking service, Marcus, has had little success. This partnership therefore could signal a move by Goldman Sachs to work with a well-regarded brand in order to regain consumers’ trust. It’s also a reflection of the increasing popularity of embedded finance. Effectively offering banking as a service to other institutions in order to enter the consumer market. 


At Manifesto, we recently carried out a study into what drives trust in the UK financial services sector in our report “Mind the Gap: Have financial services lost the human touch?”. From our results, 32% of customers said exceptional customer experiences with minimal points of friction helped to drive trust. 


It is clear that exceptional customer experiences is one area that Apple has no problem capitalising on. Perhaps this is the reason that Apple has managed to gain 6.7m Apple Card users since its launch 4 years ago – 60% of these customers use Apple Card as their primary credit card. Therefore, the card’s uptake has not only been widespread, but also useful, with many users preferring the Apple Card to other types of credit cards in the market.


Our findings around the criticality of customer experience in building trust seems particularly pertinent in this context, where a Big Tech firm with a world-class brand and track record in delivering seamless customer experiences is tackling the traditional financial services sector via a partnership with an incumbent.


In addition, we looked at what factors drive the most value for customers and what innovation actually means to them. 36% of respondents defined innovation in financial services as launching new ways of gaining value from your money. Again, Apple is certainly playing into these stats by making it easy for users to gain value from their money through easy ways to save, therefore actively helping them in their everyday lives. This has the impact of helping customers to build lifetime consumer value rather than focusing on quick win, short termist strategies.


The Trust Pyramid


In the context of our ‘trust pyramid’Goldman Sachs offers the sound infrastructure (the bottom level of the pyramid) from which Apple can launch their frictionless services (level two). The top level – human experience – is where Apple is able to build emotional trust with their customers by delivering products that will actively help them in their day-to-day lives. Although the top part is really important, it is crucial to note that it would all fall down without the more functional capabilities at the bottom of the pyramid which Goldman is able to provide.


In a world where seamless customer experiences are more important than ever, traditional financial institutions can optimise opportunities to partner with a brand that can leverage their expansive tech capabilities. In the case of Goldman in this example, it is also a chance to boost its reputation and provide greater opportunities for the future.


Interested in hearing more?


In our report “Mind the gap: have financial services lost the human touch?”, we covered the fundamentals of customer trust and discussed what we believe to be the blueprint of success. If you want to read more on this topic, you can download the full report here.


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