New Zealand-based ASB
has launched Save the Change, the latest attempt by a major bank to
promote a savings-based affinity programme, in a bid to boost
savings. As Douglas Blakey reports, the initiative has got off to a
flying start with 10,000 customers signing up within two weeks of
its launch in October.
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ASB has become the latest
financial institution to launch a savings-based affinity programme
in a bid to encourage customers to save as they spend.
The savings
initiative, a first in the New Zealand market, means ASB customers
can now elect to round up their debit card transactions to the
nearest multiple of NZ$1 ($0.75), NZ$2, NZ$5 or NZ$10, depending on
their savings goal.
Increased competition for
retail deposits has boosted the growth of savings programmes around
the globe, particularly in mature markets where innovative products
tend to be at a premium.
Examples include Bank of
America’s Keep the Change product – blazing a trail in the segment
on its launch in 2005 – National Australia Bank’s AddsUp service,
rolled out last May and Lloyds TSB in the UK, which launched its
own Save the Change initiative three years ago.
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By GlobalDataASB’s offer does however
differ from the aforementioned savings programmes by excluding a
commitment to match part of the customers’ savings.
Catherine McGrath, ASB chief
executive for customers, markets and products, discussed with
RBI the thinking behind ASB’s Save the Change.
Retail Banker
International (RBI): Why is now a good time for such
a product launch?
Catherine McGrath
(CM): It is a good time as many New Zealanders have become
more focused on ways to save or reduce debt following the fallout
from the global financial crisis.
While many people often
struggle to save, the importance of ensuring that you have some
savings has received more prominence over the last two years. Save
the Change is another way ASB can assist customers in either
starting to save, or saving a bit more on top of their current
savings.
RBI: Unlike
similar products in other markets, it seems that ASB is not
offering customers a bonus or incentive?
CM: Research
indicates customers will see the steady increase in their savings
account as the incentive to participate, coupled with the ‘set and
forget’ structure of the programme. Customers can elect which
savings account(s) the ‘change’ is transferred to at the end of
each day including ASB’s high-interest online savings account, or
the full access savings account which gives customers the
opportunity to win monthly prizes.
RBI: How is ASB
promoting Save the Change?
CM: ASB has
recently launched an advertising campaign in the press, online and
direct marketing to existing customers as well as branch based
marketing.
The campaign centres on the
key message of ‘Save while you spend.’
RBI: In what
ways does the ASB scheme differ to similar
products?
CM: We
believe there are three unique facets to ASB’s Save the Change (a
first in the New Zealand market). First, customers have access to a
personalised Save the Change calculator as part of the ‘My Money’
toolbox in ASB’s internet banking application, FastNet Classic.
When a customer logs into FastNet Classic, Save the Change can
forecast how much the customer would have saved over the last year
based on their own transactions. By selecting a rounding amount,
the customer can visualise how quickly saving adds up and the
difference between whether they opt to round to $1, $2, $5 or
$10.
Secondly, customers have the
flexibility to set the rounding amount to help them reach their
goals, instead of an amount prescribed by the bank.
Thirdly, ASB has given its
customers the option to save their ‘change’ into someone else’s
savings account, or split their savings across several ASB
accounts. We wanted our customers to have flexibility. Customers
have the autonomy to manage their Save the Change preferences in
FastNet Classic, including the nominated rounding amount; inclusion
of all automated transactions or just EFTPOS or suspending their
contributions to Save the Change.
RBI: How has
Save the Change been received?
CM: In the
two weeks since its launch on 5 October, 10,000 customers have
registered for Save the Change, and over $70,000 has been
saved.
The response has been
overwhelmingly positive. Feedback on the Save the Change response
page gives a snapshot, including the following examples:
- “A really great idea. It
will be really good to see the money that would otherwise have been
frittered away actually going somewhere important. Thank you
ASB!” - “LOVE LOVE LOVE it! Thanks
ASB!” - “Loving the new initiative!
One of the best ideas I have seen from any bank in recent years and
such a simple concept! I have told many people about this already
and they all wish their bank had this application – way to go
ASB!”
RBI: Can Save
the Change further boost retail deposit
metrics?
CM:
Increasing deposit metrics was not the driver for introducing Save
the Change as the money is already in the customers’ transaction
accounts. Save the Change was developed to help ASB customers
develop their savings habits and will benefit the individuals and
the Bank over time.
