TD Bank wants to help its customers spend a little less money — and has thus launched a transaction tracking app that uses the time-tested “green means go, red means stop” method of cueing human habits that traffic lights have perfected. The new system alerts consumes with red, yellow or green messages to warn users when they are paying out more or less than they normally might.
Particularly favored among users is how easy the app reportedly is to use: Consumers are not expected to make a budget — the app instead tracks their spending with each purchase to let them know if they are spending more or less than usual by category (dining out, entertainment, travel, etc).
“The real-time nature encourages customers to change their behavior toward their financial goals,” Rizwan Khalfan, chief digital officer at TD Bank, told Reuters in his first interview about customers using the app. “We were not expecting this.”
About 750,000, or 20 percent, of TD’s 3.5 million mobile banking customers in Canada have downloaded the TD MySpend app since April, Khalfan said. About 30 percent of those who did download the app went on to use it — and clocked monthly savings in the 4 percent to 8 percent range.
Rizwan said the bank plans to promote the app more heavily through marketing, once they have a fuller idea of how early adopters are using it.
Will users stick with it? That is always the question with apps of this kind —statistically speaking, money saving apps are a bit like gym memberships. Lots of people start out with high hopes, but only about 5 percent to 10 percent of them actually tend to see it through long enough to enjoy any benefit.
Greg Midtbo, chief revenue officer at Moven, the financial technology company that developed and licensed MySpend to TD Bank, noted that many spending apps don’t easily pull together data from accounts at different institutions, making it hard for consumers to get a full enough picture. TD MySpend combines spending from different deposit and credit card accounts only at TD Bank. Khalfan said the bank is working on bringing in information from other banks — though there are security issues with that plan.