What's wrong with money saving robots?

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Sam Abrika
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The rapid boom of transaction round-ups and auto-saving apps promises an intelligent and effortless solution to save money. Unfortunately, this is a fallacy.


There is always a tradeoff when technology makes something easier. My parents learned to manage money before the age of the internet. No mobile banking, not even online banking to check the balance! The only way for them to know how much money they had left was to track everything on paper since banks used to send statements only at the end of the month, and with up to two weeks delay.

Person filling in a piece of paper
Managing money in the past was much tougher than nowadays, yet, my parents never fell into overdraft and never spent money that didn’t exist. This doesn’t mean the boomer generation is smarter than ours, they just learned how to manage money the hard way.

Then came the technological “progress”, bringing internet, contactless payment, Apple Pay, Google pay… and the robot savers.

Initially intrigued, I tried these robo-saving apps and hated them. They could move anything from £5 to £500 (as if I couldn’t do that myself!), and I had no clue as to how much cash I should keep in my current account to avoid overdraft. These “smart” assistants turned money management into a headache.

I also tried the transaction round-ups. This simple “money saving” tool only created noise in my list of transactions which made it difficult to track my expenses. They would move about £10/month into a pot which wouldn’t pay for my next holidays.

But it gets worse. A lot of people end-up falling into overdraft while using these automated solutions. Effectively, they are borrowing money at a 20% interest rate to earn 0.5% on a saving account.

Not only they are not saving anything, but they are losing money. And they don’t even realise it. With growing overdraft profits, banks are certainly aware of this trend.

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The real problem is that our generation didn’t develop the same money management skills as our parents. All these automated solutions will never make you good at saving and that’s why you will never see any round-up gimmick in Cash Coach.

We want to put millennials in control of their finance, help them develop their skills, and make them feel proud of their progress. So unlike other saving apps, we use AI to augment people’s understanding of their finance, not to replace it.

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