Mobile Technology for Matched Savings
Individual Development Accounts (IDAs), which offer a combination of financial education and matched savings, are an established intervention designed to help low- and moderate-income (LMI) individuals build assets. IDA programs vary in attributes such as match rates, savings goal amounts, program length, communication between savers and administrators, and other variables. Despite the benefits of IDAs, there are challenges that savers and administrators face that make IDAs difficult to scale, such as the associated administrative burden, program attrition, and a lack of efficient technologies.
Many savers struggle to meet their monthly savings goals, stay on track, and access their account information. There is evidence from behavioral economics research that reminders can increase savings and that text message reminders may affect IDA savings behavior.
Given technology’s potential to scale IDA programs and engage savers, the Boston Fed has spearheaded a partnership with an app developer and a local IDA administrator to inform the development of a mobile web app. The mobile app is designed to accompany LMI savers participating in IDA programs, providing them with secure, real-time access to their savings account information, savings progress, and customized reminders based on their savings plan and transactions. Through evaluating the app’s impact, we hope to learn the extent to which principles of behavioral economics delivered through accessible technology can incrementally promote savings behavior that is also being encouraged through matched-savings programs.