SEATTLE — Saving money? Yeah, there's an app for that — or at least there's a blueprint for one.
"Squirrel," a project from Verity CU SVP/CMO Shari Storm, was recently named as the runner-up for the first annual COOP THINK Prize at CO-OP Financial Services' annual THINK Conference. "Squirrel" was conceived as a smart phone app that lets users squirrel away money by diverting funds they would have spent on discretionary items into a savings account.
"Credit unions have always promoted thrift," noted Storm. "We've had Christmas clubs for decades, and this is the same concept, really."
The idea for Squirrel came about after a meeting between Storm and Jayson Halladay, co-founder of Piggymojo, a web-based savings initiative that uses Twitter to help users save money. What would make Squirrel different, said Storm, is its immediacy.
"One of the reasons that saving money is really hard is because there's no instant gratification," said Storm. "You really want to use [Squirrel] right at that moment when you've just passed up the opportunity to spend money."
The app is designed to be very simple: users enter a four-character PIN and enter a dollar amount, note the item they've skipped (such as $5 for coffee) and then click send, transferring the money to a savings account. Storm said the app is a way to communicate to consumers that saving doesn't have to be done in large dollar amounts, and that even skipping a 99-cent candy bar or a $5 cup of coffee can make a difference.
Storm conceded that while the app would not do anything that mobile banking can't do, the point is to keep it simple.
"When I log into mobile banking, I see my credit card balance, my mortgage balance, my bills-mobile banking is too robust for this to be a really quick, simple transaction." The point, she said, is to be able to quickly divert the unused funds into savings and then forget about it.
Because Squirrel did not win this year's THINK Prize (see "ECCU Staffer Wins First $10,000 THINK Prize," May 23, 2011), its future is questionable. Storm said she feels as though she has taken the idea as far as she can and hopes that someone else will pick it up and partner with Piggymojo to make it a reality.
"My credit union thinks it's a good idea, but we're not in a position to put up the seed money to have it come to fruition," said Storm. "An app like this would probably cost tens of thousands of dollars to develop. At this point in time it doesn't seem likely that I would lead that effort."
Storm added that had she won the $10,000 prize she "would have had some seed money and more of a platform" to make it a reality.
Complicating matters, she said, is that whatever organization creates the app will also need to find vendor partners; For the app to function as it's conceived, the smart phone needs to be able to communicate with a CU's core system to actually move the money around.
Were it to become a reality, said Storm, one possibility would be for credit unions to license the app and then resell it as their own.
"I think it's definitely up for research whether you can charge for it," said Storm. "Credit unions are going to have to figure out ways to generate income, and this could be a revenue generator." Storm added that, "I happen to think that we shouldn't be shy about charging for apps. I think it's hilarious that people spend hundreds of dollars on their devices and then balk at spending 99 cents on an app."
A Little Boost For CUs, Too
In addition to promoting thrift, one of Squirrel's ancillary benefits could be the way it helps position credit unions in the public eye.
"It brands us as innovative, and I think it's something that young people would like," said Storm. "One of the things we struggle with as an industry is trying not to be frumpy-trying to be innovative and relevant, and I think young people would embrace this app. A lot of people have come of age in a bad economy and they are interested in saving money and being thrifty."