Saving With (artificial) Intelligence

When Ahmad’s mobile phone pings in a certain way, he doesn’t even need to look at it to know that the interest rate on his saving account has just been increased automatically by his bank. What he does, instead, is quickly check where his favourite football team has won a match in the past few minutes. Ahmad is a fan of Manchester United, and his bank automatically rewards him when the team scores.

A few decades back, when I was growing up, saving money meant making sure you managed your expenses within a tight budget and depositing the balance into an account with your local bank, earning a modest interest that was tracked by updating a passbook every quarter.

Fast forward to today and saving has never been easier. From innovative products to digital tools that help you to save at the click of a button to personal financial manager apps, customers today have myriad ways to save for a rainy day or for that dream holiday.

Savings as part of lifestyle and affinity

Feeling lazy to go for your daily run? Bank accounts, such as Emirates NBD’s Fitness Account, encourage customers to keep fit by providing a higher interest rate based on the number of steps you take daily. Bank of America’s Keep the Change is a successful savings programme that rounds off your small daily spends on your debit card and deposits the difference into your savings accounts, helping you to save even when spending.

Banks today offer savings accounts tailored to meet the needs of different segments of the market: whether it is for children that teach them the value of money, or for students that offer low fees and discounts or senior citizens that offer higher rates and protection, customers can opt for the product best suited to their needs.

Digitisation has also been disrupting the savings space with the introduction of a variety of tools. Just as with impulse spending, banks today also help customers to save on impulse by pushing a button on your Apple Watch or by shaking your mobile phone.

Staying on top of your money

The growth of AI has helped create algorithms that learn new behaviours based on customer spending patterns, making the process of budgeting and saving frictionless, especially for millennials. Today, personalised saving alternatives or better interest rates are no longer because of a friendly bank manager. Banks use predictive analytics to provide customers with easier ways to set financial goals and maximise savings towards them.

Personal financial managers such as Mint help budget and track spending and stay on top of your money. An app — it’s even called Bucket — lets you work towards checking off items on your bucket list enabling you to save while tracking how close you are to that holiday in Bali. Another called Ipon, meaning savings in Tagalog, allows you to set a goal and take weekly challenges to meeting it. The Savedroid app allows you to save in crypto-currencies. And Joy helps you spend and save money to maximise your happiness quotient.

Customers today also have the option of saving through their favourite social media platforms. Savings accounts can be opened and managed on Twitter or Facebook with a higher number of likes or followers earning more interest. Customers can co-opt their friends and family members to contributing towards their savings goals or education funds. Saving for a goal or retirement has indeed come a long way from sewing up money in a mattress or stashing it away in a vault artfully hidden behind a painting.

The value of nest eggs

What hasn’t changed over the ages is the importance of saving. Every culture reinforces to its young the importance of the hardworking ant that saves for the winter as opposed to the frolicking grasshopper to inculcate the savings habit early. Savings provide a vital cushion against unforeseen events or emergencies as also achieve goals without paying a large sum in loan or card interest. Additionally, a good national savings rate is a key ingredient in spurring economic growth — governments today actively promote financial literacy and inclusion to build good financial practices.

From being a dreary task that one did grudgingly to being a fun part of every moment of your life, the art of saving has undergone a transformation for the better. Money can’t buy love as the famous song goes, but for life’s practical matters, a healthy bank balance remains a key requirement.

Suvo Sarkar is the Senior Executive Vice President & Group Head — Retail Banking & Wealth Management at Emirates NBD.