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A Bank Card that Rewards you for Saving

Our group discussed the idea of a debit card that rewards users for budgeting and saving.

Photo of Lillian J Warner
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Who is your idea designed for and how does it support the dreams and obligations of those 50 and older?

Our card gives credit union members incentives to save and budget. It also gives credit unions more opportunities to connect with local businesses.

Saving and Budgeting: Our group discussed the idea of a debit card that rewards users for budgeting and saving. Similar to Bank of America’s Keep the Change savings program, customers would elect to have a certain number of dollars go towards a specific savings goal (or goals) every time they bought specific products. For example, a customer could create a “Savings Goal” for a family trip they want to take to Hawaii. The customer can manually add as much to the savings account as they want, anytime. In addition to that, the customer also chooses, through their bank, to have a percentage of every purchase made at a gas station go towards their Hawaii savings goal, too (e.g. customer chooses to automatically add 25% of all gas purchase amounts to their savings account--every time they spend $100.00 on gas, $25.00 automatically goes to their Hawaii savings account).

The percentage designated towards automatic savings can be changed by the customer whenever the customer wants. There are also different automatic savings options. Customers can choose to have a small percentage of every purchase amount go towards their special savings account (like Keep the Change), or, like in the example above, they can select percentage amounts of specific types of purchases to be added to their special savings accounts.

Credit unions could partner with businesses to increase the rewards customers see in their accounts. For example, the credit union could partner with a local restaurant chain to promote a special deal like this: “For the month of October, customers will receive 2% cash back (into special savings account) on every purchase made at a local restaurant.”

Customers could also open joint savings accounts to work towards their saving goals. Families could participate in saving for one goal together. For example, multiple parties could contribute to the joint savings account for the family trip to Hawaii. There would probably need to be one admin for the whole account.

Data Visualization: Credit unions want to improve the financial health of their customers. Offering help with budgeting is one way credit unions can do this. For users logging into their bank accounts from their mobile phones or desktops, they would be able to see a spending report every month. They would be able to clearly see how much they contributed to their savings account(s) through the automatic savings program. They would be able to sign up for email alerts congratulating them on reaching certain monthly goals.  Users would be able to sort and sift through their own data.

The online banking interface would offer several different ways of visualizing each user’s spending data every month. The visualization would intelligently recognize spending habits and personalize the data visualization for each user. For example, a user spending more money on Starbucks vs. a user spending more money at a certain time of day would have different visualizations, pointing out their spending habits. The app could generate tips on how to save money, based on each user’s data.

What early, lightweight experiment might you try out in your own community to find out if the idea will meet your expectations?

We could create prototypes of the budgeting tool. We could create mock-ups of the types of data visualizations we want to give customers re: their spending habits. We could use a sample bank statement of a customer (with their consent) to draft some visualizations of their spending data. We could show it to them and ask for feedback.

What skills, input or guidance from the OpenIDEO community would be most helpful in building out or refining your idea?

We appreciate all feedback. Our idea has many components and we are wondering if all of them are feasible. We especially wonder if giving members the option to customize their savings percentages would be too much. We also wonder about the rules and regulations of joint savings accounts--would what we proposed regarding joint savings accounts actually be possible?

Tell us about your work experience:

I work in Human Resources at the Gallatin School of Individualized Study at NYU and I am getting my MS in Integrated Digital Media at NYU Tandon School of Engineering.

Please check all that apply:

  • I'm not currently involved in a credit union, but am curious to learn more!

This idea emerged from

  • A student collaboration

8 comments

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Photo of Anthony Chukwuma
Team

This idea is great and similar to my 'Little Drops' idea. I really believe the banks and cooperatives should help people save. I have mwt people that have had more than 500 million Naira pass through their accounts/hands and become very poor between 50 and 60 years and it bothers me.Can we all collaborate on these ideas?

Spam
Photo of Lateef
Team

I put some thought into this, and I think your solution exists -- but maybe it hasn't been adopted by the Credit Unions you're familiar with. I know big FIs have this capability built in to their online banking systems, like Bank of America for example.

CUs serve a very specific purpose for a very specific community -- and their performance is measured by member satisfaction rates more so than the total assets number traditional banks use to gauge success. Thus - programs like the one you propose make a lot of sense for CU members. I think there's a lot of tech out there (like Kate Rushton's Moneybox suggestion) that simply needs to be adopted quicker by FIs, including CUs, which would make consumers smarter with their money and ultimately increase brand equity for the sponsoring FI.

The concierge type help that we're seeking from Apps (inherently at OUR service, beck, and call) is something that is straightforward, obvious, in-demand, yet elusive. Why are these apps elusive? I just don't think banks and CUs have a strong financial incentive to invest into the customer/member experience in an age where they're making a tidy sum off of the money you save by lending that cash to other customers and investing it. So, like Bank of America and Chase cashback programs, they don't deliver a meaningful, substantial sum of saved up cash...and that causes consumers to shy away from these programs. Consumers see through things like this -- they realize that they are in fact spending money to save money...something's wrong with that picture. We want to save money to save money.

I think CUs can benefit from your concept - but we'll need to deliver a very strong business case to redirect CU resources away from investments that have already been through a cost/benefit analysis.

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Photo of Lillian J Warner
Team

Hi Lateef --thank you! You bring up a lot of really good points. I agree with you. We would have to definitely consult on a much deeper level with with credit union employees/strategists before refining anything about this idea. 

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Photo of Jaskeerat Bedi
Team

Lillian J Warner & Team: Great post! I see a lot of potential in this idea. True, as Kate said there are some initial apps in the market but there is still scope for better services that can help you organize and in turn plan your finances. Also, there can be more creative business models associated with making these free to the actual users. Another opportunity might also lie in seeing how "Smart Homes" can augment "smarter finances"

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Photo of Lillian J Warner
Team

Hi Jaskeerat Bedi -- I love the idea of thinking about how smart homes could come into play with this idea. Thank you!

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Photo of Kate Rushton
Team

Hi Lillian!

I hope you are well and you and your teammates are having a nice weekend. 

Have you seen the 'Tip your Future' idea submitted by the OpenIDEO Meetup Chicago for the Financial Empowerment Challenge? It might help in the development of your idea. 
https://challenges.openideo.com/challenge/financial-empowerment-challenge/final-feedback/tip-your-futureter 

Spam
Photo of NYC OpenIDEO Chapter
Team

Hi Lillian J Warner Tanvi, Hasan and Aurora, this is a great idea with a lot of potential. Yet, as noted by Kate Rushton there is a lot and you might want to decide what is the focus...   One way to integrate the main focus (I believe it's triggering people to save) with data visualization you can explore how data visualization can encourage / trigger certain behaviors. See for example https://challenges.openideo.com/challenge/renewable-energy/research/tidy-street-changing-neighbors-behaviors-through-voluntary-monitoring-and-public-infographics 
As I was looking for another example I found this interesting paper https://cs.umd.edu/~jonf/publications/Froehlich_PromotingEnergyEfficientBehavirosInTheHomeThroughFeedback-TheRoleOfHumanComputerInteraction_HCIC2009.pdf
I also recommend you look at all the suggestions Kate provided as they can provide you with useful inspiration. If you were to go back to the insights of your research you might be able also to decide what are the core components (based also on the main needs / pain points you uncover during your research). If you have developed personas, you could create experience journey for them to highlight where are the most salient needs. Rapid prototyping is also a great way to test your idea and find out in which direction you want to go.
al 

Spam
Photo of Kate Rushton
Team

Hi Lillian!

It is great to see you here with another great idea. 

There are lots of features in this idea. Which features are a 'must have' and which are a 'nice have' for the customer? It would be interesting to get a quick mockup/very early prototype tested with them. 

The data visualisation is interesting. Have you read the comment on this post about mortgage statements? https://challenges.openideo.com/challenge/financial-longevity/research/rethinking-the-layout-of-boarding-passes

Earlier today I was looking at my bank statements and none of the purchasing information is aggregated in a way that is meaningful for me. I know how much I have spent and the individual purchases, but how much have I spent on coffee? I don't know but I only go to one or maybe two coffee shops. 

I just want to highlight these posts in case you missed them. I think they might be of benefit to your team.

https://challenges.openideo.com/challenge/financial-longevity/research/substitutions-the-food-substitutes-app
https://challenges.openideo.com/challenge/financial-longevity/research/instant-gratification
https://challenges.openideo.com/challenge/financial-longevity/research/saving-by-spending

I have the Moneybox app. It allows me to deposit ad hoc or regular amount and rounds up my purchases to the nearest pound (approximately $1.20). Then I swipe 'accept' or 'reject' on each transactions (Tinder-style) to confirm if I want that purchase amount to be rounded up or down on my recent transactions. It is about every few days that I get an alert to do this. Then once a week this money is withdrawn from my linked account. https://moneyboxapp.com