The Six Pillars of Automated Saving

A growing number of neobanks and financial apps are peddling convenient and automated ways to save and invest, breaking dramatically from the banking tradition of treating saving as a do-it-yourself activity. Javelin’s analysis of 25 top financial institutions illustrates that banks and credit unions are falling short, with only a handful experimenting with the four primary building blocks of direct deposit, algorithm-driven models, round-up-the-change schemes, and automated-saving rules that incorporate aspects of behavioral finance. Javelin’s Six Pillars for Automated Saving report:

• Identifies six principles that are necessary to transform a grab bag of saving tools into a proactive and engaging service.
• Provides a hierarchy of the four primary savings approaches.
• Examines six types of existing and developing tools in the banking tool box that are essential to build a service that guides customers to build sustainable saving and investing habits.
• Highlights FIs and savings apps that demonstrate best practices.

Key questions discussed in this report:

• Why should automated savings services be a high priority in 2021?
• What can a bank or credit union do to serve the many consumers who aren’t sure where to start, rather than the narrow segment of self-motivated do-it-yourself money managers?
• What are the basic building blocks for an automated saving service?
• What features and capabilities must FIs upgrade and integrate to create a successful proactive, advice-driven service?
• What financial institutions and savings apps are doing something noteworthy?