Are credit unions losing out on savings apps?
Americans desperately need help saving money, and fintechs are stepping up with intuitive apps that make saving simple and automatic. As consumers now funnel billions of dollars into these apps, banks and credit unions that don’t join the crowd could be missing out on a big opportunity.
It’s no surprise that Americans aren’t very good at saving money.
As of October 2019, the U.S. personal savings rate stood at 7.8%, according to the St. Louis Federal Reserve. And a survey by Bankrate found that 40% of Americans can’t come up with $1,000 to handle an unexpected emergency.
Fintechs, and a few innovative banks, are now answering the call with new apps that use artificial intelligence to analyze users’ accounts and automatically move small amounts of money into savings.
These apps are designed not only to make saving simple and easy, but also so painless that even cash-strapped consumers can build a little cash cushion. The idea is that withdrawals are just small enough so the user doesn’t feel pinched, and just big enough to improve their savings situation.
While the idea of stealthily swiping money from checking accounts sounds ridiculous in a traditional banking context, it makes sense in the age of AI, smart phones, and changed expectations of Millennial and Gen Z consumers.
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