high-interest online savings player launched in the fourth quarter
of 2007 by Iceland’s largest banking group, Kaupthing, has
attracted more than €2 billion ($3.1 billion) in deposits less than
seven months after its launch (see RBI
587).
rolled out in Finland, Norway and Sweden – has now been extended to
nine European countries, including the UK, Denmark and Germany, and
is set to launch in a tenth, Switzerland, in early June. The
Reykjavik-based group says it is looking to roll-out Edge into more
markets, including some outside Europe, as it looks to diversify
its funding model away from wholesale markets and tap consumers for
funds.
In the UK, one of the world’s most
saturated direct banking markets and one in which industry pioneer
ING Direct continues to struggle (also
RBI 587), Kaupthing has just begun offering one of the
highest term savings rates, 7.01 percent AER for a 12-month account
as well as 6.97 percent for a 6-month version.
Go deeper with GlobalData
Asked about concerns that the UK direct
banking market is overheating, with banks offering higher and
riskier savings rates in an unsustainable bid for funds, Kaupthing
spokeswoman Emma-Jayne Byrne told RBI: “We appeal to savvy
customers that check the best buy tables and look for the best
rates. It’s true, there may be some concerned by banks offering top
rates. But those people are also knowledgeable enough to know that
we offer some of the best guarantees on the market, including the
full UK banking protection scheme – not just the passport scheme
like some of our competitors.”
Rival Icelandic banking group Landsbanki
rolled out a high-interest online savings account in the UK called
IceSave back in October 2006 and says it has so far managed to
attract around £4 billion ($7.8 billion) in deposits by offering
consistently high and competitive savings rates. It recently
improved the rate of its primary Easy Access Savings Account,
arguing that in the current volatile banking environment “a
consistently competitive interest rate on easy access savings will
become increasingly evident”.
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