#PersonalFinanceManagement / Smart savings app Chip launches an interest-bearing savings account

The UK-based fintech, which offers an AI-powered savings app, is rolling out an interest-bearing savings account…

Chip’s app leverages Open Banking to let users connect their bank accounts to its platform and set savings goals. It then uses transaction data and AI to calculate how much a user can save, and automatically moves that amount into a Chip account, while also allowing users to add more money manually.

As more personal finance management (PFM) apps like Chip move into banking with the addition of savings products, incumbent banks should look to ramp up their own PFM offerings.

Here’s why: Consumers would prefer to use PFM tools from their banks, but find existing tools lacking. Over 75% of respondents… said they would prefer to use PFM tools from their primary financial services provider (typically a bank), while just 6% said they’d prefer PFM tools from fintechs or neobanks… But global consumers are currently more dissatisfied with their banks’ PFM services than with any other type of services they provide, and over 40% said PFM services from nonbank providers are more useful and helpful, per Oracle. This suggests banks have a chance to improve customer satisfaction through more robust PFM tools.

Tailored PFM features that help customers visualize and build their savings can help banks drive up deposits.Features like “spare change” roundups, account aggregation, account balance visualization, goal setting, or automated savings are all examples of features offered by popular PFM apps like Acorns, Stash, Mint, and Digit, among many others. Each of these tools helps users see their specific progress over time – and clear evidence of growth could encourage them to further add to their accounts. Banks can leverage their vast resources to build or acquire similar tools for their own mobile apps in order to reap these benefits.