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Introduction
Irish households hold approximately €175 billion in deposits, and the proposed Irish Investment Account (IIA), expected to launch in July 2027, could create a significant new market for investment providers.
For investment providers, the IIA presents an opportunity to attract new customers and develop deeper financial relationships. For banks, however, it also creates a commercial dilemma. Encouraging customers to move money from deposits into investments may reduce an important source of funding. But if those customers invest elsewhere, banks risk losing the opportunity to develop the wider relationship.
With the core tax benefits available from every provider, customer experience could become an important competitive differentiator. Fees, investment choice and advice will still matter, but how easily customers can open an account, make informed investment decisions and access support could help determine which providers attract and retain their business.
Look beyond deposit balances
Consider a customer with €80,000 in deposits who decides to invest €10,000. If they open an IIA with their existing bank, its deposits fall, but it retains the investment business. If they invest that money with a competitor, the bank loses the same deposits without gaining the investment relationship.
For banks, the example illustrates why looking at deposit balances in isolation may obscure the value of the wider customer relationship. A deposits team rewarded for protecting funding may have little incentive to encourage investing, even where it benefits another part of the bank.
Financial institutions will need to understand customer value across deposits, investments, lending and protection, while distinguishing between customers with the capacity and appetite to invest and those better served by remaining savers.
The customer journey from saver to investor
While banks face challenges in managing the shift from deposits to investments, all providers will need to understand how customers make that transition. For first-time investors, choosing a provider is only one of several unfamiliar decisions. Understanding where customers need information, guidance or reassurance could help providers identify opportunities to differentiate their customer experience.
Discovering the IIA
“Is this for someone like me?”
Choosing a provider
“Who can I trust, and why should I choose them?”
Opening the account
“Why are they asking me all these questions?”
Choosing investments
“Which option is right for me?”
Experiencing a market fall
“Should I sell?”
Seeking support
“Can I speak to someone?”
Competing on customer experience
These moments offer opportunities for financial institutions to distinguish themselves from competing providers. Five aspects of the customer experience could be particularly important in attracting first-time investors and building lasting relationships.
- Familiarity may beat sophistication, initially: Customers may feel more comfortable investing through a bank they already know. But a competing provider with clearer information, better pricing or a more attractive proposition could win their business. Providers need to give customers a reason to choose them for investments.
- Simplicity can build confidence: Customers moving from deposits into investments face unfamiliar questions about risk, returns and access to money. Clear explanations can help them make informed decisions without minimising investment risks. For some, remaining in deposits may be the appropriate choice.
- Digital convenience is a default expectation: An attractive interface cannot compensate for a cumbersome customer journey. Providers should examine the entire process, from opening and funding an account to managing investments and accessing support, rather than simply putting a digital interface on existing systems.
- Falling markets will test the relationship: For a first-time investor, seeing a €10,000 investment fall to €9,000 could be a defining experience. Financial institutions need to provide clear information and appropriate support during volatility, including access to people when needed. Silence during falling markets could undermine an otherwise strong relationship.
- Protection can strengthen trust: For people moving from saving into investing, explaining the purpose of suitability or appropriateness assessments, risk disclosures and safeguards can help build confidence and trust. Integrating these requirements into the customer journey can help customers understand their decisions without weakening protection.
Decisions before launch
The proposed July 2027 launch should not be treated solely as an IT deadline. Boards and executives need to consider how the IIA fits their commercial strategy and what will make their proposition competitive.
Key questions for an IIA strategy:
- Strategy: What role should the IIA play in our wider customer strategy?
- Customer economics: How will deposit migration affect customer lifetime value?
- Share of relationship: Are we protecting product balances or the wider customer relationship?
- Proposition: Why should customers choose us?
- Customer: What prevents them from becoming confident investors?
- Journey: Can customers understand, open, fund and manage accounts easily?
- Digital: Are we actually designing a digital-first experience?
- Protection: Are customer experience and regulatory requirements designed together?
- Data: Can we identify and appropriately engage relevant customers?
- Service: What information, advice and human support will customers need?
- Operations: Can we manage transfers, withdrawals and enquiries during volatility?
- Measurement: Are we assessing customer value and outcomes across products?
Thinking beyond the first investment
The IIA could help providers develop deeper relationships with customers who have previously kept most of their money in deposits. But those relationships will be contested. Success will depend on more than attracting initial investments.
Financial institutions will need to consider how much of their customers' wider financial business they retain and whether their proposition continues to meet customers' needs as markets and circumstances change.
Winning the first investment will be important. The greater opportunity may lie in building the confidence and relationships that encourage customers to keep investing with the same provider.
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