Feeling in Control: Bank of America Helps Customers to “Keep the Change”

The bank hoped to bring a human-centered angle to an industry which is hardly known for innovation. For this, a team from the bank partnered up with IDEO designers. In their user research, the group conducted interviews and observed families in cities all over the US. According to IDEO designer Sally Madsen, the team was “talking to people who were great at saving, and people who struggled with it, taking inspiration from some of the existing, every-day habits people have around savings”. Soon, they realized an interesting pattern: In many families, mothers were in charge of managing finances. An extreme group in this pattern turned out to be single mothers: They are often on a tight budget and have to keep track of their spending meticulously.

Many single mothers kept checkbook registries, in which they listed their bills, expenses and ATM withdrawals.

Many of these women kept checkbook registries, in which they listed their bills, expenses and ATM withdrawals. In the beginning of the 2000s, this was a common way to manage money – a time before banking apps and online banking was widespread. When the design researchers looked at these checkbooks, they realized that several women rounded up numbers: Instead of listing 22,73 dollar for a refueling bill, they listed 23 dollars. This simplified calculations, but it also added a little buffer each month – at the end, a few unexpected dollars were left over. The IDEO researchers realized that this behavior revealed and unaddressed need in banking, and offered the opportunity to create value for customers and the bank. They designed the “Keep the Change” program.

Keep the Change

“Keep the Change” is a service that automatically rounds up all purchases made with a debit card. These rounded up cents are transferred to a savings account. As a treat (and marketing campaign), Bank of America matches these saving at 100 per cent for the first three months to a certain amount.

The “Keep the Change” service turned out to be a huge success for Bank of America. After its launch in September 2005, the program attracted 2 million customers in less than a year. Since then, more than 12 million customers signed up for the program and saved more than 2 billion dollars in total. 60% of all new customers enroll for “Keep the Change”.

Closely observing user behavior and interpreting their workarounds was a crucial step leading to this successful outcome: “People couldn’t tell us that they wanted a debit card that would ‘keep the change.’ It didn’t occur to them”, IDEO CEO Tim Brown said in a Forbes interview. “But we saw how many people were rounding up to the next dollar when they paid for things.” He describes the success of this innovation “in its appeal to an instinctive desire we have to put money aside in a painless and invisible way” in his 2008 Harvard Business Review article. According to Sally Madsen, the Keep the Change program “meets Bank of America’s goal of generating more business for their savings programs, but it’s also something that meets a core basic need that people have, which is finding ways to manage their financial security.”

Bank of America’ former Senior Vice President and product developer Faith Tucker underlined the feeling of empowerment for Bank of America customers in a designbetter interview: “There was an almost unexpected and very emotional effect from this new service. People who previously never had savings suddenly did. And it wasn’t the amount that mattered; even a small amount of money in their savings account gave them a sense of power and control over their finances.”

Read about a #designthinking classic: Bank of America's Keep the Change!
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