Nearly six in 10 Americans have less than $500 in their savings account to pay for an unexpected expense, according to a new report from Bankrate.
It was that dire statistic that prompted Brendon McQueen, co-founder and CEO of financial services company Shuttle Finance, to create an app-based employee benefit that helps American employees save more.
“We thought that [statistic] was really scary,” he says. “The financial wellness products out there weren’t leveraging technology that could create a consistent, positive outcome. Most financial wellness offerings are kind of education-based. How do we let people save and not think about it?”
Enter the Savings Assistance app.
The app, which will be available for iOS and Android operating systems this fall, allows employers to contribute to employees’ financial goals alongside with them. It automates three ways for employees to save money each month.
Savings Assistance uses round-up technology, which tracks transactions and rounds up to the nearest dollar, to save spare change. The app also allows employees to set up a recurring deposit of $25 to $100 a month and enables employers to contribute to employees’ accounts. While the average contribution is $50 a month, McQueen says employers do not need to contribute.
When employees save money with the app, it sits in an FDIC-insured new savings account that is directly linked to personal checking accounts, McQueen says. There are no fees or transaction limits, he adds.
There is, however, a cost to the employers to offer the b2b enterprise app — which is not available for consumers to download without their employer sponsoring it.
The app costs between $2.99 and $4.99 per employee per month, but employers who pay upfront will receive a 20% discount; employers with 50,000 employees or more will also receive a lower rate.
The pricing difference is determined by the type of plan: base or professional.
The professional plan includes employer contribution capabilities, data insights, concierge account management and some product customization — there is no white-label option.
“I’ve seen historically that it can be really hard to get program insight, even if you have great technology,” McQueen says. “Reporting is at the heart of this app.”
Employers will have access to de-identified, aggregated data in real-time to see how many employees are saving.
Shuttle’s existing data clients, which McQueen says “are all over the map, from technology to finance companies,” will be the first to use the app when it rolls out in October. The technology will be available for other employers by early 2018.
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