At a time of year when finances have been getting a workout, it is easy to lose sight of the long term, but those day-to-day decisions can have profound impacts on savings goals. To help Kiwis manage both, New Zealand financial services company, Booster has unveiled its latest innovation – the Booster Savvy Fund. This sophisticated financial product, expertly crafted to blend the practicality of a day-to-day debit card with the strategic foresight of an investment account, marks a significant evolution in the way Kiwis manage their finances.
Diana Papadopoulos, Chief Customer Officer at Booster describes the genesis of Savvy as rooted in a deep understanding of the everyday financial challenges faced by individuals. “For 25 years, we’ve been helping Kiwis with long-term savings. Throughout this journey, we’ve gained deep insights into their challenges and successes. One of the most significant challenges we’ve observed is managing day-to-day budgets and spending. Everyone has the capability, but it becomes difficult amidst complex lives and the daily task of keeping track of every dollar and cent. Our focus was originally on long-term savings, but we realised that there was a need for assistance in daily financial management. We believed there was a better way to address this, which led to the creation of Savvy.”
Savvy’s standout feature is its dual functionality. It works both as an investment account and as a debit card, ensuring easy access of funds for daily use. Papadopoulos elaborates on its unique capabilities: “A lot of people at the moment, have a bank account but their money sits there – it’s like a holding cell. What Savvy does is it gives you visibility of exactly where you are spending your money and gives you a return on every dollar. It helps to prompt you along by learning the way that you spend and lets you know if you’ve got bills coming up, and whether or not you’ve got enough money to cover that. But then, importantly, it also has saving tools built into it, that you can utilize without even thinking. It just becomes an automatic part of your day-to-day life. And that’s what helps you to make those little changes that get you ahead.”
At its launch, Savvy offers a five percent return, which is generated through its investments in things like government and bank securities and bank deposits. “That’s really about giving people the ability to access their money but still also earn a great return. And so what we’ve done there is to make it as attractive as possible for you to save and spend smartly. You can have all of your money sitting in Savvy and know that every dollar, no matter how it’s divvied up within Savvy, is getting a return.”
The launch of Savvy has been the result of a seven-year journey, requiring the need to connect seamlessly to the payment network and to engage with regulatory bodies to ensure any regulatory queries were resolved. This process involved overcoming hurdles both on the regulatory front and in ensuring the integration of several technological partners.
Achieving this level of accessibility involved strategic partnerships with key players in the financial sector including Mastercard and BanzPay. These partnerships have been vital in establishing a strong link with the payment system – a fundamental aspect of daily transactions.
Reflecting on the developmental journey of Savvy, Papadopoulos talks about the tenacity required for the journey. “The first thing was that we wanted to make sure that this worked easily and effortlessly as any customer would expect. Seven years ago, we had a prototype that worked, but it wasn’t perfect. For example, it wouldn’t work in EFTPOS machines, it would only work through payWave. We know that our customers don’t want that kind of friction, and so it was about slowly but surely putting all of the pieces together.”
This process has overcome several regulatory and technical challenges along the way. “From a regulatory perspective, what we are doing is different. We haven’t found much else in the world that compares. So really, this is about engaging with the regulator to help them understand what the product is and how it works. Also when you’re doing anything like this, you are working with a lot of different partners, and so there’s a significant technology build behind it.
While Savvy helps with day-to-day money management, the potential impact on long-term financial habits is also an important consideration. Diana believes that by making spending habits visible and demonstrating the benefits of saving, Savvy can positively influence financial behaviours. “When you make it visible, first of all, how much you’re spending and what you’re spending it on, and then what the opportunity is if you save your money and how it can grow, it helps to make it real for people. And that’s what will help people get on top of their financial game. At our core we are about helping people increase their financial resilience. A tool like Savvy does this in a way that helps people in the day-to-day, but it also contributes to those bigger, more lofty goals.”