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Startups Get the Ball Rolling for Consumers Looking to Save

This is the first in our series of posts following the evolution of banking online, highlighting innovation in online and mobile apps and how they relate to  Business Banking. This week’s subject was sparked by innovation in digital savings accounts. Consumers and finance professionals are looking to increase savings, excitement, and above all quality of life.

This week American Banker asked the question, could a simple app change our spending habits?
Motivational rewards provided by banks is an old concept. Consumers have been racking up credit card points for years, but an app that makes saving effortless and exciting is a new digital concept.

As of October, three startups have run with the idea.

SaveUp is a San Francisco-based tech company with an app that allows you to earn credits when you save. You also have a shot at $2 million jackpot!

CEO, Priya Haji says the idea came from frustration caused by managing her finances.

“Looking around us, we noticed virtually all Americans were trying to rebuild savings and pay off debt. We know how lonely and frustrating personal finance can be. Maybe what people need is a little fun and motivation.”

Boston based startup ImpulseSave (recently acquired by Betterment), follows a similar idea, with users saving toward a visual goal. The app is designed to humanize transactions, and tailors them to individual needs. In layman’s terms your savings account could look a lot like your Pinterest board.

Social Money offers a variety of packages to help you save. Each program allows companies to let their users make contributions to a goal-based savings account.

Will incentive alone spark a change in lifestyle?

Some critics say no, and frankly it’s too early to tell, but it is important for bankers to track this transformation as well to understand how account holders want to interact with their money.

Technology Reporter for American Banker, Mary Wisniewski gives her insight on the subject.

“The savings account is being reimagined by young companies to go beyond the ability to set up automatic savings deposits, and to some degree, offer an incentive to inspire activity.”

How does this translate to business owners?

There’s a gap between personal finance functionality and what you can do as a business. Apps like these are a step forward for consumers, but where do they leave businesses? I like the concept of “fun” savings. I also see the opportunity for business owners and finance professionals to benefit from the concept as well.

In general, business apps lag behind those targeted at consumers. With the recent launch of incentive-based savings apps aimed at individuals, you have to wonder: what kinds of business-focused apps will arise to help small businesses manage money while achieving their goals?

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