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Get me addicted to Saving!

“Saving is consumerism needlessly postponed” – Rory Sutherland, Ogily

My name is Duena Blomstrom and I’m addicted to instant gratification.

My four and a half year old often says “waiting for patience is boring” and I can’t disagree. I’ve been “waiting for patience” for 36 years and like Godot, it failed to arrive so as a result, I want everything right then and there. Seeing how goals such as attaining higher levels of enlightenment (sic) or increasing my fitness level are not ones I can reasonably expect to happen over night, they generate even more frustration that goes into my need of instant gratification. But then again there’s shopping and that rarely makes me wait.

I remember hearing the terms “addiction to shopping” for the first time in college and thinking – that’s a silly term, one can’t be addicted to the action of acquiring anything at all, I understand being addicted to fashion or hobby equipment but not just general “stuff”. I argued with one of my professors that it’s absurd and he calmly pointed me to study after study showing how people are simply experiencing an overwhelming urge or owning something new and whether this is of value such as an antique or the 18th lavender candle from Ikea, the action of acquiring is satisfying that need.

If I am critically honest I am now one of the people in those studies. Most of us have material goals of what they want to acquire next. Sometimes they are worthwhile saving goals such as a new family car or the dream vacation home, but sometimes they are smaller, immediate things that will make our lives a little bit better or somewhat more temporarily enjoyable. Those items find themselves on virtual wish lists and un-checked-out digital shopping carts, they aren’t substantial enough to call them saving goals.

What I am intensely curious about is the following question: “Is there a way that we can redirect the strong energy behind the buying impulse and the craving of the respective material belonging into savings?” In other words – is there a way to change my addiction to shopping into an addiction to savings? Of course, as we all know, changing financial behaviour is a mythically hard thing to do, but isn’t this so chiefly because we have collectively tried very little to actually accomplish it? Where is the real gamification? Where are the incentives? Where is the “Purple Cow” of savings?

So far there is ample research to show that forced savings works. Chile, Singapore, the US Army. All examples of how if you want people to save you have to make them.

Let’s take Digit. Everyone in FinTech had a forehead slapping moment when they came out. Technology to look at how and where we spend and whisk away money when we’re not paying attention or needing them to enhance our savings. Unleashing the power of “Free to Spend” for the good. Brilliance. And it is, undoubtedly. This will be basic bank functionality to our kids, I’d bet the farm, but it is also the opposite of what I am curious about which is whether there are ways in which we can make it truly enjoyable for people to save.

SmartyPig is of course the most famous example of what’s there is in voluntary savings. I’ve been looking at their trajectory from the get-go and fully expected their Savings API to do much better and become the standard by now but banking is not a meritocracy. Unfortunately I couldn’t try them out for this article as they only allow new members if they are US citizens now that the accounts are backed by BBVA Compass. The premise is simple. Define saving goals and then see them grow while allowing your social network to contribute to them if they liked. At one point it was announced they had launched One Click – a Chrome browser extension to help people save. It embodies two of the concepts key to incentivising Savings – “Impulse Saving” (the ability to save then and there whenever the fancy takes you) and “In Context Goal Creation” (the ability to see something online and create a goal for it).

I have set about on a quest to understand how far the industry has gone to try this and more. Now, I know what banks have done about this – nearly nothing. 90% of banks don’t offer an ability to define saving goals in one’s digital bank (this is going to rapidly change but likely not till the middle of next year). The ones that did anything (including darlings of FinTech such as Simple)  do it in a dry, matter of fact, non-engaging way “tell me what you save for and I will do you,  the consumer the favour or writing this word and this amount in my digital space then I will show you a visual representation of how much you have saved on a regular basis”. An even smaller subset actually create virtual accounts and superimpose it over real saving accounts and connect direct debits (regular payments) to them to ensure this is happening. There are only a handful of banks that have even dabbled into concepts such as Impulse Savings and Gamification.

Of the tiny percentage that got this right we should quote Standard Bank and Westpac which is a great example and the trailblazer of the concept of Impulse Saving (and they claim they were inspired by Rory Sutherland’s absolute sheer genius TED talk, that alone is worth bank brownie points) and then there’s my favourite – Nationwide’s Impulse Saver (see video here) – a pre-login piece of functionality so good I nearly switched current accounts to get. “Nearly” because it wasn’t quite compelling enough.

(This is a tangential potentially rhetorical point but question to the FinTechMafia pundits would be why is it that Westpack’s red button was launched more than 4 years ago and banks failed to copy such basic functionality?)

So I turned to my App Store. There are apps for counting sheep, surely there are apps to put together all these concepts and go beyond.

I have played with TrackMyGoals and Urge, attempted Porkfolio and foolishly forked the money for CashTrack. Porkfolio needed me to have purchased theirspecial piggy device before I could even play with it – cute but ever so useless. CashTrack is beautifully designed but it essentially just adds a background picture to my goal and has no integration to actual money and TrackMyGoals is a glorified calculator as well. Urge I found very interesting as it has a great name and a good concept – make the consumer much more mindful of the financial tradeoffs they are faced with in their every day life with every purchase/non-purchase decision (reminded me a little of Meniga’sToBuyOrNotToBuy but not as advanced) but the basic interface is off putting and the concept seems to be missing something.

While not claiming to have exhausted research on this (whoever has better examples please let me know in the comments and I’m happy to edit) I’m left disappointed. I need something intensely emotional to change behaviour and start saving.

Flash me random pictures of my child every time I’m about to hit “buy now” on Ebay, browser! Nudge me with a notification to hit my impulse save red button every time that my location tells you I’m passing a Ted Baker shop in London, bank! Define competitions with my social network on who saved more on a given month or who’s closer to their seasonal goals! Give me incremental raises in APR the better I do one month!

I want something to get me addicted to saving and I want it NOW!



Comments: (2)

Sandip Patil
Sandip Patil - ANZ - bangalore 07 May, 2015, 08:11Be the first to give this comment the thumbs up 0 likes

You have echoed my thoughts. Much more innovation needs to happen for savings.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 08 May, 2015, 11:46Be the first to give this comment the thumbs up 0 likes

Others get benefitted when a consumer spends. Who gets benefited when a consumer saves? I guess the answer to this question will convince you that you need to make your own arrangements to get yourselff addicted to saving:). I'm saying this on the back of my experience of failing to get any of my banks or 3rd parties interested in creating a mobile app to automate a manual method that I've been using to ensure that I don't bust my budget while using credit cards for nearly 25 years. If, after reading this, you're looking for some graceful "out" from your resolution of saving, here's my favorite aphorism on the subject: "No one got rich by saving"!

On a side note, ICICI Bank is at least one bank I can recall that has been providing a Digit-like feature on savings accounts in India for over 20 years. Called Quantum Optima, it sweeps any account balance over a customer-set, static threshold into a higher interest-bearing fixed deposit account. I know that Digit computes the threshold smartly and dynamically but, despite not doing that, Quantum Optima type of accounts are just as effective. Besides, Digit sweeps the money away to another bank, thereby creating the friction of having to monitor yet another account, which is not the case with Quantum Optima type of accounts that not only keep the money in the same bank but also under the same Relationship ID.

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