UK challenger bank Tandem has added a new feature to its mainly digital banking platform. Tandem has introduced “intelligent auto-savings rules” to help users set aside their spare change to improve their savings habit. According to Tandem, savings are swept from their existing current accounts, connected to the Tandem app, and into a new interest-bearing Tandem account. Using behavioral science, Tandem will combine their new rules with a series of in-app prompts and notifications to help nudge people into improving their savings habits. When a rule is triggered, perhaps spending on a certain day of the week or from a connected account, money will be automatically moved from their current account into their Tandem account. This money will then start to earn interest.
Customers are prodded to start saving and often, building up a regular rhythm of saving and making progress towards sought after goals. In a recent survey, Tandem said they found that over a quarter of British citizens don’t set any money aside each month.
Matt Ford, Product Director, says that improving savings habits is something anyone can do but habits are hard to change:
“Almost everyone we have spoken to wants to save more, but often find it difficult to adjust their spending habits and free up money. Setting aside lump sums isn’t always the best approach. We aim to make it as easy as possible for users to get started, showing that small, regular savings can actually lead to saving large amounts.”
Ricky Knox, Tandem CEO, explains that once users have saved a certain amount they will be able to migrate their money into a fixed term saver where Tandem provides “leading rates.”
The Tandem app already aggregates a user’s data from all of their bank accounts and cards, something that gives them access a comprehensive view of their finances and a growing suite of AI driven highlights that offer tailored advice. The new service will be made available in the coming weeks.