S-Pankki

Säästäjä—Finland’s first mobile microsaving service

Saving, investing and funds are often seen as issues that are difficult to approach. Easy and inexpensive forms of saving are in demand among ordinary people.

S-Bank identified an opportunity to offer something unique to its customers: the bonuses paid to their accounts every month represented an excellent way to start saving in a light way. In cooperation with Palmu, S-Bank designed Säästäjä, Finland’s first mobile microsaving service. The service makes saving in funds easy and inexpensive for everyone.

Säästäjä is the most economic way of saving in hybrid funds in Finland. More than 3,000 customers took Säästäjä into use during its first three months, and up to 17% of the service’s users started saving for the first time.

  • Over 3000

    active users during the first three months

  • 17%

    of the service’s users are saving for the first time

  • Only 0,5%

    costs of the sum invested in a year

How can Finnish people be inspired to invest?

People in Finland are typically reluctant about investing and saving in funds. Most average wage earners perceive small initial capital and a low level of knowledge as obstacles too great to begin investing. In the larger scheme of things, Finns store an enormous amount of money on accounts with a poor rate of return.

S-Bank took a boldly innovative approach to this challenge: microsaving. To make saving easy and routine-like, S-Bank decided to set up a service in which saving takes place unnoticed within everyday life and in which the investments are directed in investment funds automatically, without the consumer needing to take any action themselves.

Their selection for a design partner fell on Palmu which, in cooperation with S-Bank, began to conceptualise and construct the microsaving service.

The first steps of Säästäjä

The service’s assembly started from the construction of prototypes and an accumulation of customer understanding. Three different prototypes functioned as a basis for customer interviews in which the partners found out end-users’ opinions on the possible methods by which to implement the service.

The customer interviews facilitated by Palmu’s team of experts revealed that the average customer of S-Bank was not well versed on investing and that the built service should be extremely inexpensive and easy to use for it to serve its target group.

The conclusion was that consumers were not, in principle, interested in the technologybehind the service. The saving aspect is the one most important and approachable to the consumer—which is why the service came to be called Säästäjä, Finnish for “saver”.

The service’s technical implementation and programming was carried out by HiQ. The
financial technology company Taviq designed the algorithm which automated the
investment logic.
“We’ve said that we want to make saving a new national hobby. Säästäjä represents the first step on this journey.”
– Hanna Porkka, Head of Wealth Management, S-Bank –

Automated saving in funds

The basic idea behind Säästäjä is to free the customer from decision-making and all of the effort related to investing. The service can be taken into use with the online banking codes of S-Bank. When taking the service into use, the customer fills in a questionnaire which charts the user’s willingness to take risks as an investor. Based ontheir answers, the service’s users are profiled as either very conservative, conservative or aggressive investors which, in turn, guides the service in terms of which funds it invests their savings in.

Users define a saving goal for themselves and choose their preferred saving methods

Säästäjä currently includes three means of investing, which users can combine according to their preferences.

1. Microsaving provides users with two different saving options:

  • The user can save either by saving a euro of each purchase they make with an S-Etukortti
  • Visa debit card in the Bonus fund or by transferring the bonus they earn from their purchases within S Group directly to the fund.

2. Monthly saving: the user saves the amount of their choice every month.

3. Initial investment: the user selects the initial investment of their choice for their savings.

The algorithm builds every saver the fastest and safest route to their goal, depending on to what degree the user is willing to tolerate market fluctuatons. The service reduces the risk automatically once it begins draw close to the targeted sum.

The most inexpensive and easiest way to save in Finland

Säästäjä is the cheapest way to save in a hybrid fund in Finland—the automated investing reduces the service’s costs, which enables a price level lower than that of competitors’. In November 2018, the daily newspaper Helsingin Sanomat published a comparison according to which the Säästäjä Uskalias and Säästäjä Maltillinen funds found in Säästäjä were the most inexpensive actively managed hybrid funds in the comparison.

The service can be taken into use and terminated free of charge, and its costs are only0.5% of the sum invested in a year. The price is the same for everyone.

Given that the service is mobile, it is present in the customers’ everyday lives. S-Bank’s Säästäjä app is available for downloading in app stores.

Results

Säästäjä’s primary goal—to encourage inexperienced investors to save—has already been achieved. 17% of the service’s users are saving in funds for the first time The service’s first version has gotten off to a good start, and more than 3,000 customers have taken it into use during the first three months.

  • Customer

    S-Pankki

  • Design

    Palmu ja Taviq

  • Implementation

    HiQ