Innovation of the month: Text Savings by USAA
Efma’s Innovation of the Month award for June goes to USAA for its Text Savings solution which aims to help those customers who struggle to save money.
USAA realized that many of its customers did not believe that they are capable of saving money. As a result, they have insufficient savings to deal with emergencies and unexpected costs.
“The roadblock for many of the members is psychological and relates to loss aversion and the feeling that savings requires a lot of effort but little reward,” explains Alice Garcia, USAA’s HR business strategy and planning director.
With this in mind, the bank wanted to remove both the effort and psychological barriers of saving money, by automatically identifying and transferring small amounts from the customer’s checking account to their savings account. And so ‘Text Savings’ was born.
“With this innovative capability, now members are able to save money without any effort and make the mental shift from a non-saver to a saver,” Garcia says. “Additionally, this makes members more likely to look at other savings tools offered by the bank, which will help increase their financial security.”
The bank began with a 60-day pilot involving 645 members and then launched Text Savings to all members in May 2017.
Results to date have been successful. During the pilot, 63% of users increased their savings by 10% and 46% doubled their savings.
“At the beginning, the majority of these members admitted that they weren’t successful at saving money,” Garcia explains. “Many had tried and failed before, while some had never tried at all. They felt powerless and frustrated with their lack of discipline and expressed that they could not “do it alone”. Those who did have some money in their savings did not think it was enough.
“Reactions started out positive and increased over the course of the pilot. Members expressed feelings of hope and progress. They were even more encouraged because they did not feel it coming out of their checking accounts and they liked how it occurred automatically making it thoughtless and effortless.”
Text Savings will be automatically selected as a nominee for the Efma-Accenture DMI Awards 2018. Submit your innovations on the Efma Accenture DMI portal. 5 July is the deadline for the last Innovation of the Month for the 2018 edition. Participation is free of charge and open to all financial institutions but Innovation of the month is reserved for Efma members.