Huntington Bank’s new AI-driven tool plugs a savings gap

• Huntington Bank launched an automated savings feature that sweeps money a customer isn’t likely to use into a savings account three times a week.
• We think customers’ potential savings combined with the bank’s existing suite of financial wellness features will enhance stickiness.
• Insider Intelligence publishes hundreds of research reports, charts, and forecasts on the Banking industry with the Banking Briefing. You can learn more about subscribing here.

Huntington Bank launched an automated savings feature, per American Banker, augmenting its digital banking rethink from several years ago centered around budgeting, cash flow analysis, and goal setting. The feature, dubbed Money Scout, which the bank built in partnership with Personetics, evaluates a customer’s recurring cash flows, predicts upcoming expenses, and sweeps money the customer isn’t likely to use into a savings account three times a week.

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Huntington is transitioning its expanding financial wellness functionality from oversight and planning to action on the customer’s behalf. The bank released its digital banking redesign, which it calls the Hub, to all customers at the end of 2018. It quickly added to budgeting and cash flow oversight a saving, spending, and goal-setting feature last winter. It has since extended the Hub concept to its private bank and small business customers. The suite of digital functionality is part of Huntington’s customer experience strategy, which emphasizes financial wellness tools.

Digital solutions incompletely address consumers’ financial health needs. FIs have a lot of room to grow with tailored financial advice, according to the Insider Intelligence 2019 Mobile Banking Competitive Edge Report—in particular, when it comes to addressing the complex needs of segments of millennials.

Huntington’s take addresses the unique nature of these customers’ cash flows and debt that most often includes credit card, auto, and student loans. With these financial obligations, a widespread problem for that group is growing savings: In the Millennial Financial Health Report, Insider Intelligence cites that more than half of consumers have less than $1,000 in savings.

Of existing saving solutions, high-dollar automated savings would most benefit consumers. Money Scout closely resembles Royal Bank of Canada’s (RBC) NOMI Find & Save, which the latter released in 2017. Both tools can contribute substantially more to savings than rules that deposit a few cents at a time, which several other FIs have tried. Huntington’s sweep feature maxes out at $150/week, which adds up to nearly $8,000/year. RBC exceeds it with a maximum of CAD 250/week ($188.42). That can add up to CAD 13,000/year ($9,798).

The AI-based savings sweep is not an effective investment tool, like a brokerage account might be; little interest is paid on savings accounts. But combined with direct deposit, the feature is likely to increase customers’ stickiness and help them accumulate substantial reserves without direct action.

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