U.S. Bank rolled out a new savings tool Friday that uses artificial intelligence (AI) to help its customers decide how much they should be saving.  

The “Pay Yourself First” tool, powered by technology from the fintech Personetics, identifies and recommends potential savings for users by analyzing variables like cash flow and debt-to-income ratios. According to its Friday announcement, the $554 billion U.S. Bank is the first financial institution in the U.S. to offer the product in its mobile banking application.  

“It’s natural to think first about covering upcoming expenses, or to just be busy with other things in life,” said Damian Warren, senior vice president of consumer digital channels experience at U.S. Bank, in a statement. “All of these tendencies can lead customers to be more conservative in how much they set aside. Pay Yourself First helps customers by removing these barriers.”  

The Pay Yourself First solution analyzes a customer’s capacity to save at each pay period and automatically moves an appropriate amount into a savings “envelope” within their bank account. Users can also fine-tune the program to target a desired dollar amount or percentage of income, and the tool uses data analytics to determine how much to save based on their spending patterns. 

Personetics’ technology uses more than 100 different key performance indicators such as balance trends, cash flow partners, essential and nonessential expenses and types of debt, said Dorel Blitz, vice-president of strategy and development at the company. Targeted at “mass retail and mass affluent,” customers, the tool will not be accessible to all U.S. Bank clients, only those considered “eligible” based on the firm’s models. Eligible customers will get a pop-up notification to try out the savings solution. 

“We are running a real-time eligibility analysis, according to the amount customers can actually put aside, and then the application will proactively engage with the customers,” Blitz told Bank Automation News. “We are helping banks to leverage their biggest asset, which is their own customers’ financial transaction data.” 

Personetics has raised $93 million in funding from Warburg Pincus, Sequoia Capital and Lightspeed Venture Partners, according to Crunchbase. The fintech has previously partnered with the Royal Bank of Canada (RBC) to launch the bank’s digital assistant NOMI, and works with other banks like the $170 billion Ally and the $1.4 trillion Santander.  

While there has been demand for financial advisory platforms for a while now, that adoption tends to lag a little, Stephen Greer, an analyst at research firm Celent, told BAN.  

“They’ve appealed to a very small subset of consumers, those that are budget hawks,” Greer said, adding that adoption rates have tended to stay in single digits, close to 10 percent. Although straightforward data may not excite customers enough, using analytics to offer recommendations could help engage them more. “When you’re talking these kinds of data analytics on top consumer finances, often the goal is to build that kind of [advisory] trust and make it easier for consumers to bank.”  

Although other personalized savings solutions like Acorns and Mint have already been on the market for years, the newer crop of solutions leverages a data-centric approach to provide forward–looking recommendations. In October 2020, Bank of America launched a personal finance tool called Life Plan, that helps customers establish goals across various categories, like family, health and work. The application uses data and artificial intelligence to suggest actions to customers via the bank’s digital assistant Erica.  

The data-driven approach is becoming a trend, as customers wonder, “‘Can this analysis provide me insight without me having to actually do anything myself?’” Greer said.   

Bank Automation Ignite, on April 13-14, is the event for inspiring automation initiatives and investment in financial services. At the virtual event, financial services professionals can discover new use cases and technologies that are accelerating automation in banking. Learn more and register at www.BankAutomationIgnite.com.