Tandem Bank is celebrating the one year anniversary of its intelligent Autosavings feature, which gradually and effortlessly builds an individual's savings account for them. More than half of Tandem Accounts are actively set up to use the feature, suggesting the tool has been an incredible success. Tandem’s goal was to help incentivise individuals to prioritize their savings whenever possible, and given the deteriorating state of global affairs due to Covid-19, we now collectively understand the importance of creating a financial safety net.
Autosavings is an effort to close this savings gap, help individuals set money aside and create savings habits that last a lifetime. Even prior to Covid-19, Tandem found that saving is a challenge for many who are already accustomed to making their budget stretch, especially at the end of the month. This is particularly true for those aged 22-29 as over 50% of them live pay cheque to pay cheque with no savings at all (Money Advice Service).
Now, as Covid-19 evolves and the disruptions to our health, lifestyle and the global economy intensify, we have all become even more reliant on our savings. Many of us are already grappling with unexpected redundancies or furloughing and those of us still fortunate enough to have an income understand that the future remains fragile and uncertain.
Tandem is seeking to assist its customers as much as possible by translating specialized knowledge and behavioural economics principles into accessible features. Autosavings was created on the basis of taking incremental amounts from an existing budget and setting that aside into a savings account that accumulates interest.
Autosavings is made up of three components, Round-Up, Safe-to-Save and Weekly Deposit. These tools help users overcome the lofty hurdle of learning how to save and figuring out how much they can afford to put away by doing the hard work for them.
Round-Up is the most popular method, with 94% of Autosavings accounts having elected to use it. Tandem will automatically Round-Up the spare change from transactions to the nearest pound and allocate that incremental amount to a user’s Tandem savings account. By linking their other bank accounts to the Tandem Round-Up feature, customers can ensure all spare change from all of their card transactions goes into their savings account.
Rather than simply being deposited into an ordinary pot, Tandem accumulates savings in an easy access savings account that accrues interest, and users can withdraw those funds whenever they please.
The second component, Safe-to-Save, uses Artificial Intelligence to forecast how much money someone is able to set aside by analysing the amount coming into their account, compared to the amount going out of their account. Using various data points including an individual’s income, bills, and spending habits, Tandem will automatically predict how much money can safely be set aside in a user’s Tandem Account.
Via automated rules, the average ‘active’ Autosaver has comfortably set aside £222 without even trying. This is a remarkable outcome, especially when it is compared to the finding that 16m people in the UK had less than £100 saved andput aside (Money Advice Service).
Finally, Weekly Deposit helps to make saving a habit by allowing individuals to set up a recurring amount to be put in their account on a weekly basis. Over a thousand users have a regular weekly deposit set up for an average of £16.40. Users can also top-up this deposit whenever they please. Over a thousand top-ups are made every week which leads to an average of £20 extra per saver per week.
Tandem has truly made savings accessible for the everyday individual, with £368 being the average balance of a Tandem Account using Autosavings.
This flexible programme allows users to aggregate spare income from all of their other bank accounts into their Tandem Autosavings account, and users can select all, or any combination of the three Autosavings features.
The automatic features make saving easy and affordable while eliminating the labour intensive process of having to constantly recalculate finances as income or bills fluctuate. In unprecedented times, our savings can act as a buffer that can float us from one month to another.
Co-Founder and CEO Rick Knox says: "Autosavings has been one of the biggest successes in Tandem’s journey. We're exceptionally proud of the product and are delighted to say that over half of Tandem account holders have chosen to enable its intuitive features. We aspire to make saving accessible for everyone by using our knowledge and expertise to eliminate barriers to saving for the average person.”