Using spontaneous in-app savings prompts may help small-dollar savers grow their savings balances, new research from Financial Health Network shows.
The research was conducted with BECU, the largest credit union in Washington State, and the Financial Health Network’s Leaders Lab, a program funded by MetLife Foundation to uncover the financial health impacts of innovative products and services. Financial Health Network and BECU tested a feature in the credit union’s banking app called QuickSave. The app feature allows users to spontaneously transfer a small amount of money into savings in one swipe.
The findings showed QuickSave was most helpful to certain groups of customers based on their initial savings balances. Those with small initial savings balances ($5.01 – $500) saw the greatest benefit when invited to use QuickSave and grew their savings by $179—17% more than members who had similar savings balances but were not invited to Quick Save.
“We learned that savers at different points along their savings journey may need different types of tools and support,” said Heidi Johnson, Director of Behavioral Economics with Financial Health Network. “Our work with BECU showed that suggesting a small dollar amount to save, and making it really easy to do so, can have a positive impact for the savers who need support to start building up their balances.”
A tool such as Quick Save may be specifically useful for people who have opened savings accounts but are experiencing challenges in growing their balances.
For savers who initially held higher savings balances ($2,000 or more), there was a smaller increase in savings for those invited to use Quick Save than for those who were not invited. This underscores the importance of using segmentation in app-feature development and deployment.
Read more about the research.
BlackRock’s Emergency Savings Initiative
BlackRock announced a $50 million philanthropic commitment to help millions of people living on low to moderate incomes gain access to and increase usage of proven savings strategies and tools – ultimately helping them establish an important safety net. The size and scale of the savings problem requires the knowledge and expertise of established industry experts that are recognized leaders in savings research and interventions on an individual and corporate level. Led by its Social Impact team, BlackRock is partnering with innovative industry experts Common Cents Lab, Commonwealth, and the Financial Health Network to give the initiative a comprehensive and multilayered approach to address the savings crisis.