EARN helps families save using technology

EARN, a long-term partner of Consumer Action, is a San Francisco-based non-profit that designs and launches online savings tools to create financial stability for America’s most economically vulnerable populations. EARN’s ultimate vision is that well-informed American households will achieve financial success through proven strategies, fair public policy and their own hard work.

In 2001, EARN began offering its clients financial education services and individual development accounts (IDAs), special savings accounts that give low-income savers small monetary incentives as they save their own money. In order to help themselves help the consumers they serve, EARN staff has attended Consumer Action’s train-the-trainer events and used many of our publications, including Saving Your Home from Foreclosure, Internet Safety, Credit Cards: What you need to know, Teens & Money, You Can Buy a Home, Keeping Your Home, Credit Reports and Credit Scores, Staying on Track with Credit, and Keeping Your Bank and Credit Card Accounts Safe from Fraud.

EARN staffers also began aiding Consumer Action’s Audrey Perrott in providing technical assistance to community agencies interested in starting IDA programs in their region. Over the years, EARN had grown to become one of the largest IDA providers in the country, helping over 6,000 consumers save over $7 million of their own money. Like many in Consumer Action’s network, EARN demonstrated that low-income families can and will save when given the right opportunities and incentives. EARN’s average saver had a household income of less than $25,000 per year.

Although proud of its history offering IDA accounts in the Bay Area, one of EARN’s core values has always been to serve a wider audience. In 2014, EARN made a big shift from traditional in-person financial education and IDA programs to an online matched savings product that could serve households anywhere in the United States.

At 2016’s EMERGE Financial Health Forum, it was announced that EARN was selected as the only non-profit to participate in the second cohort of what is known as the Financial Solutions Lab: a community of innovators building solutions to improve consumers’ financial lives. (The Financial Solutions Lab is managed by the Center for Financial Services Innovation with founding partner JPMorgan Chase & Co.) EARN was chosen in part due to its long history of serving low-to-moderate-income families, coupled with its promising savings technology. Since launching its program last October, EARN has registered over 25,000 members to its online savings platform.

Perrott recently caught up with EARN CEO Leigh Phillips and Director of Strategic Initiatives Megan Wong to discuss EARN’s fintech innovation. Fintech involves the use of computer programs, mobile apps and other technology to enable financial services online or by phone. Perrott asked Wong several in-depth questions to help network partners better understand the burgeoning industry.

When did you recognize the need to change your IDA model and integrate more technology into your program?

EARN has always placed a strong emphasis on quantitative data and qualitative feedback from our savers. This means that we are always conducting rigorous research on the impact of our programs and services in order to influence and shape our offerings.

In ongoing surveys and interviews with EARN IDA savers, staff learned that although these savers valued the assets they had purchased (for instance, a home, an education or an investment in a business), the biggest impact of EARN’s program was the positive change in our clients’ behaviors and attitudes about finances.

EARN staff also recognized that while they had delivered a significant impact to over 6,000 consumers in our more than ten years providing IDAs, it still represented only a small portion of people in the United States who could benefit from saving.

The Federal Reserve Bank recently released a study finding that a whopping 47 percent of Americans cannot pay for an unexpected $400 expense without going into debt or selling something! Yet even small amounts of savings can have a large impact on people’s lives. The Urban Institute found that families with as little as $250 to $749 on hand are less likely to miss housing or utility payments or to be evicted after an income disruption. Families with as little as $1 to $249 are significantly less likely to receive public benefits than families with no savings.

Because of facts like these, EARN decided to focus our efforts on expanding our program to help more people start saving and developing a habit of saving that will enable them to be more financially secure throughout their lives. The use of technology has allowed our agency to reach these additional people and deliver services where they spend much of their time—on their phones and computers. Technology has also enabled EARN to grow its impact sustainably, serving many more low-income families without having to grow our team at the same rate.

What prompted EARN to submit an application to the Financial Solutions Lab? Can you tell us about this competitive process? What support have you received being a member of the Financial Solutions Lab cohort?

We saw that the Financial Solutions Lab Challenge was focused on helping families manage financial shocks. EARN decided to apply because we fully believe that non-profit organizations have an essential role to play in developing technologies that ensure all Americans are included in our financial system. EARN’s Starter Savings Program does this particularly well by helping people develop the savings and behavior changes to manage shocks. We are proud to be one of nine winners (and the only non-profit) to be selected, out of over 300 applicants!

In addition to the monetary support from the Lab, EARN has received invaluable mentoring services and connections with an array of individuals and institutions across the country. By working with for-profit startups, for example, our team has been exposed to alternative methods of doing business while gaining a better appreciation for how EARN’s mission, long history and focus on low- and moderate-income communities makes us uniquely qualified to offer the services and programs that we do.

How can Consumer Action and our network of community partners support your work?

Consider partnering with us! EARN’s Starter Savings Program empowers anyone, anywhere to start saving and also enables any organization to easily offer savings to their clients. Our savings platform overcomes traditional barriers to savings that have severely limited the number and scope of organizations that provide savings assistance to their populations. For example, our technology connects to over 15 financial institutions and does not depend on a single banking partner.

Fifty organizations have already integrated the Starter Savings Program into their work and we are looking to expand our network of partners. We encourage community partners to attend one of our webinars to explore opportunities to offer the EARN Starter Savings Program to their communities.

What best practices are you able to share with agencies that are considering integrating more technology into their counseling, coaching and savings programs?

At EARN, we believe in “user-centered design,” which means that you have to start with your clients. Think about their experience at your organization, from the time they first hear about a program to the time they successfully complete it. What in that experience could be improved? What could be facilitated by technology?

As you go through this thought process, you’ll realize that technology is really helpful for certain things. It’s great for reaching more people because it automates processes that may otherwise be tedious. For instance, the EARN Starter Savings Program automatically tracks savers’ account activity for six months and automatically transfers rewards ($10 for each month the accountholder saves $20) into their accounts. Because of this, staff members who had to read bank statements, calculate savings rewards and write checks for your program are now freed up to do something else.

Technology is also great for empowering users to do things on their own. In our program, savers can make deposits into their own savings accounts and access our program online on their phones or computers. This allows them to build a savings habit in a flexible way. They no longer have to bring their bank statements to a program manager or be restricted to making deposits with a particular partner bank that has a relationship with your program in order to be eligible for the monetary incentives.

Lastly, technology is really helpful for understanding research questions that require large amounts of data. In our program, savers must fill out entrance and exit surveys about their financial habits so that we can evaluate the effectiveness of our program. We are able to look at that data to better understand how effective our program is for different groups of people by parsing the data in different ways. Our most successful partners are curious about understanding the impact of their work and finding ways to improve it, given the data that we collect.

At EARN, we’re also the first ones to admit that some things are still best done without technology. Our best partners use technology and in-person contact strategically. Coaches and counselors should continue to build strong and trusted relationships with clients. They should partner with clients to discover and achieve the clients’ goals. They should introduce technology where most applicable and use face-to-face time to go deep with clients: explaining how the technology will be used and facilitating a seamless experience for the client.

One easy best practice is to get to know the technology really well; you can’t tell clients to use it if you don’t understand it yourself! Aside from our program webinar and demo, we often encourage coaches and program staff who don’t meet the income limits for a reward-earning account of their own to set up a test account with our program so that they can experience it firsthand (contact EARN staff for instructions). We also encourage our partners to continue sharing feedback with technology providers like EARN so that we can continue to improve our product.

Is there anything else that you would like to share in terms of ways that advocates can help move the needle for programs like yours?

You can become a partner with EARN by viewing our webinar or getting in touch with our staff at [email protected]. As you work with our program, please share your success stories with us! Our partner network would love to better understand best practices in using technology to help build habits of savings in a variety of institutional settings.

Finally, advocates should encourage more families to save! America’s savings crisis is solved one person and one family at a time. With each of you on the ground as experts in your own communities, we hope to empower more and more families to take control of their finances through savings.

Note: The second round application deadline to join the Financial Solutions Lab is April 27, 2017. Click here to find out more about how to apply.