Make Money Fun Again: when lottery meets savings
By: Iain Montgomery
Tags: Banking, Lottery, Innovation, Money, Savings

Make Money Fun Again: when lottery meets savings

Savings are core to both the financial health of consumers and banks, yet there has been little innovation within savings products. Iain Montgomery Follow Nov 26, 2020 · 5 min read

We wanted to try to figure out how to make savings less “rational” and develop real concepts to bring in more ideas to make saving something people want to actually do.

From boring rational interest rates to leveraging gaming and from making it easier for people to contribute to making it harder to withdraw — we wanted to create concepts that flip banking on its head.

Alex and I have been around this area a lot, from designing ways to help the UK be more ready for retirement c.2013, to working with Canadian lotteries and Alex actually launching a digital challenger bank with ATB Financial.

We still felt there was more we could do, especially there was more we could do to make banking and savings fun. We’ve talked to 100's of customers, gone down rabbit holes at the pub and seen some really cool fintechs.

Still, too often we would hold back on the best pieces because they’d be too radical for conservative corporate clients. We’ve developed these as things we think should exist that are currently ‘client-less’.

In this piece, we explore a second savings concept.

Leprechaun: a savings account designed for those who might be more inclined to buy a lottery ticket than save. We’ve combined the two — letting customers put away a little more in pursuit of a bigger payoff.

THE BRIEF: People don’t save enough, 40% of Americans would struggle to raise $40 for emergency expenses and 21% save nothing. In contrast, half of Americans play state lotteries and the average American spends $86 a month on lottery tickets. So why do people play lotteries just as much as they save, if not more? Well, because it’s more fun and gives us an escape from reality.

Banks don’t do themselves any favors either. Savings accounts are the forgotten child of the banking industry, only really shown any love when a bank needs to increase their assets for lending. Savings propositions tend to be dull, poorly marketed and pay a pitiful amount of interest.

It’s one thing to be bad, it’s even worse to be boring.

THE OPPORTUNITY: Saving money can be fun. In a world of low interest rates, earning 11 cents in interest at the end of the month doesn’t really mean much. As a society, we celebrate and encourage spending, not saving. Instead of the unappealing lure of minuscule interest, we believe banks should give people the chance to dream big.

“I know I should save more, but it just doesn’t feel worth it. Last month I think I earned 7 cents in interest. What’s the point?”

Playing a game is fun and often rewarding, we also reward people spending, and yet saving is neither. Most people would rather take a chance on a dream, either gambling or buying things on rewards based credit cards.

We can merge something people already want and like to do, with something they know they really should be doing. We can really let them have their cake and eat it.

💰☘️Leprechaun: A savings account with a chance to win a pot of gold.☘️💰

A savings account that pools the accumulated interest, giving customers a chance to dream big, while putting money away safely for something they really want or so there’s some cash there for a rainy day.

Paired with a spending card that gives them a chance to win back the money they saved up to spend.

“My mom and dad spent years playing the lottery, never really winning anything. This gives me a chance to be financially responsible and have a chance to be lucky!”

We’ve heard time and again how low interest rates and bland experiences continue to turn people off from saving. Instead, by creating a dopamine rush like you’d see from a scratch ticket, sports betting or even crypto trading, we can create a way for millions to build better savings habits without putting their money at risk.

Further, we can bring in such elements when people spend their savings too. After all, people are typically saving to spend it on something. In our research that was often a big ticket item like a new TV, vacation or home renovation, as well as putting money aside for those rainy days like a car repair or when the budget gets blown out unexpectedly. By spending their money on the Leprechaun card, they exchange typical spending rewards based on interchange for the chance to win some of or all of their purchase value back.

“I see myself using this instead of defaulting to my credit card. I just had to spend $650 on new tires, it would have been awesome if I’d have a) saved for that with Leprechaun and b) had the chance to win the cost of them back.”

While this isn’t an entirely new idea, Premium Bonds have been a thing in the UK for decades, similar programs exist elsewhere and we’ve even seen a couple of startups launch wonky versions of the idea without really sticking the landing. That said, why shouldn’t a bank do this? Compared to the beige-ness that exists today, it’s going to set them apart from their peers.

Leprechaun represents the chance to be cheeky, a little mischievous and inspire a little hope. Leprechauns also offer a morality tale figure whose fables warn against the folly of trying to get rich quick. Whether real or not they’re a fable universally recognized as figures of amusement and joy.

Leprechaun can create a positive feeling of nostalgia in the modern world.

“When we were kids, we felt so good buying a new toy with pocket money we’d saved up for. It meant we valued what we had. Now, it’s so easy for me to rack up debt on a credit card and not value stuff I buy. This brings back some of the good behaviours my parents taught me that I then forgot.”

SEE MORE @ LEPRECHAUN

btw: yes, we know others of these exist in the US … but we don’t think they’ve nailed it

CONCLUSION: We love turning workarounds and emotions into products — we especially love bold clients who want to build bold products such as these. If you think you’d be a good fit, you’ve already done this or even if you hate this — we’d love to hear from you.

ABOUT NOW OR NEVER: Now or Never is a challenger consultancy providing strategy & insight work, modular consulting projects & new venture creation. We have worked with everyone from start-ups to large pension funds. Iain Montgomery & Alex Nuth are the co-founders of the agency — combining both big consultancy experience & the scars of actually doing innovation within organizations.