MADISON, Wis. – Credit union users of SaveUp, which offers prizes for debt reduction and savings, enjoyed improving their financial habits and said they liked their financial institution better as a result, according to the Filene Research Institute.
The Filene Institute reviewed a six-month pilot program that measured the impact of SaveUp on 14 financial institutions, including Northeast CU in New Hampshire, Educators CU and Summit CU in Wisconsin, and Xceed Financial CU in California.
Filene found that, of the credit union members who participated:
• More than half said SaveUp motivated them to save money and pay down debt
• More than 40% had a more positive opinion of their institution
• 64% visited the online saving program at least once per week
• 49% visited three or more times weekly; and,
• 50% recommended SaveUp via their credit union to their friends.
Also, 95% of the participants said they believed their credit union cared about their financial health.
“If you can create engagement and stickiness…and can get people to see the total money saved along with educational content that is fun, the combined effect is to move people to think about their finances differently,” said Priya Haji, CEO and co-founder of SaveUp.
Users of SaveUp earn points for paying down the principal on debts or increasing savings. The more points a consumer has, the higher the odds of winning a prize through monthly drawings or other online games. The prizes are funded through sponsorships, advertising and financial referrals.
During the six-month trial, 8,369 consumers used SaveUp. More than 250 prizes were awarded, 7,859 educational videos on personal financial health were viewed, 33,463 financial accounts were linked to from SaveUp, $43.3 million deposits were made and $32.4 million in debt was paid down.
Filene did not track how many accounts SaveUp users opened, but it said gaming clearly gets people to spend more time on tasks such as financial planning. The average American devotes about 2.6 hours per month on financial planning and budgeting, or one fifth the time spent on games or using a computer for leisure, it said.
Eleven of the 14 credit unions continued to offer SaveUp to their members after the pilot.
“It is improving behaviors – which is better than nothing,” said Ben Rogers, research director of Filene. “What is interesting is more than half of the people said [SaveUp] helps them reduce debt, save money or both. If more than half of people are telling you they are being motivated, that is pretty good.”
“Gamification” is popping up in various financial services circles, such as training debt collectors and in-store marketing. Haji does not see her company as a strict gamification play, since SaveUp is a financial product rather than a virtual teaching tool. “We see it as a rewards game for lack of a better word,” Haji said. “It is not a virtual reality where you pretend to put money into bank and see what the result would be.”