The app that stashes savings in a ‘money jail’

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Most Americans would like to save more, but short-term needs and temptations often prevent them from doing so. If there were a way to stash money in an account that can’t immediately be accessed, many consumers say they may have more success saving money for that ski vacation or dream wedding.

It was that insight into human behavior that inspired the development of the savings app Dobot.

The app analyzes users’ financial activity and withdraws small amounts that its algorithm thinks users won’t miss. It moves that money into a savings account separate from the one consumers use for daily spending and encourages users to name their savings goal and upload a photo with it so when they log in, they see their photo along with a progress bar.

Dobot was launched in 2016 and was acquired by Fifth Third Bancorp last year. The $145 billion-asset Fifth Third relaunched Dobot as a stand-alone app earlier this month, and is counting on it to help it attract more millennial customers.

Fifth Third’s Dobot rollout is yet another example of a regional bank playing up financial wellness in its digital offerings. Last week, Huntington Bancshares in Columbus, Ohio, launched Heads Up, an artificial intelligence-enabled feature that warns users when their spending might clash with their savings goals.

“Financial wellness is really becoming the new digital engagement strategy,” said Tiffani Montez, a senior analyst at Aite Group. “There’s always been an active push to move digital banking from something that is more transactional and reactive to something that is more personal and proactive.”

Of course, banks have been promoting personal financial management tools for some time now. Regional banks lacking the deep pockets of a JPMorgan Chase have sometimes chosen to partner with fintechs or buy technologies they like, if not build those tools from the ground up.

In 2017, for example, the $138 billion-asset KeyCorp in Cleveland bought HelloWallet from the investment research firm Morningstar. That tool now lives in KeyBank’s mobile platform, where it gives users an overall financial wellness score, along with tips to improve that number. PNC Financial Services Group built its own Virtual Wallet more than a decade ago.

But personal financial management tools are getting smarter, Montez said, noting that they haven’t always done a good job at showing users how their daily financial habits affect their overall financial picture.

“What we’re starting to see now is people really trying to use the behavioral elements to help consumers understand the relationship between spending, savings and debt,” she said.

The $109 billion-asset Huntington is taking a stab at that with Heads Up.

Incorporated into the bank’s digital platform, Heads Up uses AI and predictive analytics to analyze consumers’ activity and notify them before their spending becomes a problem. For example, it will ping a customer if their current balance is too low to cover their typical spending over the next week, or if they have a free trial that’s about to end.

Fifth Third’s Dobot focuses more narrowly on savings.

Most banks already allow customers to automate their savings, and some have experimented with twists on that. For instance, Bank of America’s “Keep the Change” program rounds up debit card purchases to the next dollar and moves the extra change into a savings account.

Few, if any, banks currently offer something quite like Dobot, though apps like Digit and Qapital operate on a similar principle: Most consumers won’t miss small withdrawals and squirreling away little bits of money at a time will eventually add up.

Andy Zurcher helped launch Dobot and is now the senior product and channel manager at Cincinnati-based Fifth Third. He said he is using Dobot to help his daughter save for her birthday party.

“For me to take money out of that goal, I have to look at my daughter’s face, tap into that goal and physically remove the money,” he said. “That becomes our money jail, if you will.”

Dobot had amassed nearly 24,000 users before Fifth Third bought it early last year. Because it was shut down and its interface tweaked to work with Fifth Third’s platform, the app now has around 4,000 users, many of them bank employees.

The app is free to anyone, whether or not they bank with Fifth Third. While the deposits will be housed at Fifth Third, the bank doesn’t see this as a deposit gathering strategy, so much as part of its broader play for millennials.

Fifth Third has also partnered with CommonBond to offer student loan refinancing and developed a student loan repayment app in an effort to appeal to millennials.

Most users set goals between $500 and $5,000, with $1,000 as the most common goal. Fifth Third did not say how much Dobot users had already saved using the app, but did say that users’ goals currently total around $22 million. Some of the most popular savings goals are vacation funds, car down payments, home improvements and weddings, Zurcher said.

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PFM Consumer banking Savings accounts Digital banking Fifth Third Bancorp Huntington Bancshares KeyCorp PNC Financial Services Group