According to a report in TechCrunch, the new savings account is powered with Tandem’s Auto Savings feature, and is a savings account built on top of the bank’s account aggregation app as well as credit cards. It will automatically put money into a customer’s savings account based on how the customer spends and how much the algorithm determines that particular person can afford to save. With the automatic savings account’s “Round Ups” feature, people can round up purchases to the next pound (dollar) and Tandem will move the change into the saving account.
Another feature is the bank’s “Safe To Save” service, which relies on machine learning to determine how much a person can save based on income and spending in the accounts connected on the app. There’s a slider to allow people to set their own savings rate. Tandem bases it on a minimum of 5 percent and a maximum of 15 percent of a person’s income. Users can also add to the savings account whenever they want to increase their savings.
“We spend a huge amount of time speaking with our users, understanding the challenges they face with their money, and what we can do to help,” Matt Ford, Tandem’s product and marketing director, said in the report. “A consistent theme which arose for many of our users was the need to save. People either felt like they were unable to save at all (as they battle through to the end of the month), or were trying to save, but spending got in the way and they were unable to reach their goals fast enough.”
The feature is aimed at solving that problem by relying on behavioral economics and technology to make it happen. By helping consumers save a small amount every time they spend, it promotes the idea that it is possible to save money, even if it’s only a little bit.