People Take Saving Seriously If It's a Game: Bank of the West

While saving money and paying debts can be its own reward, Bank of the West is taking the added step of offering potential prizes to consumers who reduce outstanding credit or boost savings.

"We want to promote good financial behavior," said Andrew Rosen, chief marketing officer at Bank of the West in San Francisco, which has entered into a marketing partnership with SaveUp, a firm that offers prizes as a lure for consumers to increase savings and decrease debt.

The $57 billion-asset bank will roll out the new program this month in its digital channels, such as social media, including Facebook and other online initiatives. "We will also encourage our employees to sign up. We want them to know about the experience as they share with customers," Rosen said, adding the rewards program will reside on SaveUp's site to provide a clear line between their financial activities with Bank of the West and the affiliated rewards program with SaveUp.

Bank of the West is one of nine financial companies to enter into marketing partnerships to promote SaveUp to their customers. Others include Spectrum Federal Credit Union and Visa's Plastyc Upside prepaid cards. The companies hope to tap into an opportunity to reduce consumer debt. The Federal Reserve estimates that total consumer debt is currently about $2.4 trillion; and a recent Employee Benefit Research study found that 43% of workers had less than $10,000 in savings in 2010 (the latest available figures), up from 39% in 2009.

SaveUp, which recently received $2 million in seed funding from Bluerun Ventures and True Ventures, this week began its public beta. Backed by Intuit's back-end account aggregation engine, the service is compatible with more than 18,000 financial institutions as a customer-facing product usable for savings, 401(k)s and other savings or investment vehicles. It can also be used to pay down loans or other debts.

Participating partners are offering SaveUp as a branded component of their existing rewards programs.

The service is designed to reward users for performing "positive" financial actions, such as increasing savings or retirement accounts; paying down college credit, mortgages or other loans; and engaging the firm's education content on the site.

Consumers earn "credits" that increase their chances to win prizes by increasing their savings or reducing debt; and are eligible to win instant prizes and are entered into weekly and monthly drawings. Prizes include a $2 million jackpot and a new car, as well as retail gift cards, electronics, vacations, debt payoffs and other incentives. The prizes are funded by SaveUp's marketing partnerships.

"Any consumer can link to any [bank account] to start earning points towards rewards," says said Priya Haji, chief executive and co-founder of SaveUp. "For financial institutions that partner with SaveUp we can offer a customized experience … partner banks' customers will not see the financial referrals or advertising which are part of funding the free version of SaveUp. Rewards and prizes for all SaveUp users are the same in the free version or bank-partner version."

Bank of the West is working with SaveUp at a time when consumers are looking for ways to track spending, savings and do overall budgeting online to improve financial health. Personal financial management providers such as Geezeo and Intuit Inc.'s Mint.com have gained in popularity in this environment, and many banks are deploying PFM on their own websites.

Bank of the West offers budgeting tools and financial planning calculators as part of its online banking. It also offers retirement, credit, debt and wealth management calculators via Leadfusion, a financial calculator and email marketing firm.

It's also not unusual for banks to use social media and the lure of contests to attract consumer attention. South Africa's First National Bank, for example, recently launched a contest in which small-business owners were invited to market their businesses and products through one-minute videos posted online, with the winner receiving free nationwide advertising exposure sponsored by the bank.

U.S. Bancorp has operated a similar contest and recently introduced "Look Up with US," a contest in which small business owners can network and win prizes based on the "best story" about business successes posted on Facebook.