Simmons Bank Helps Customers Save Nearly $5.5 Million in "Change"

Rhea-AI Summary

Simmons Bank (SMBK) Round-Up program helped customers save $5.5 million in 2023. Over 26,400 customers used the program, resulting in a 6% increase in savings compared to 2022. A Bankrate survey revealed that 57% of U.S. adults lack sufficient emergency savings, with 22% having none at all. Gen Zers are the most affected, with 31% having no emergency savings.

Insights

Financial Analyst

The introduction of Simmons Bank's automatic savings program, Round-Up, represents a strategic initiative aimed at enhancing customer engagement and financial wellbeing. The reported increase in savings by nearly 6 percent signals a positive customer response and suggests potential for increased customer loyalty and deposit growth. This growth is indicative of the program's alignment with consumer needs, particularly in light of the Bankrate survey highlighting widespread discomfort with emergency savings levels among U.S. adults.

From an economic standpoint, programs like Round-Up could encourage a higher savings rate, which may translate into a larger deposit base for banks. This, in turn, can affect the bank's liquidity and capacity for lending, potentially impacting its interest income. However, the increase in savings also suggests that consumers are more cautious about spending, which could reflect broader economic concerns.

For stakeholders, the short-term benefit lies in the potential for improved customer retention and acquisition. In the long-term, a more financially secure customer base could lead to reduced risk for the bank. Nevertheless, it is crucial to monitor whether these savings translate into long-term deposit stability or if they are subject to rapid withdrawal in case of economic downturns.

Behavioral Economist

The Round-Up program leverages behavioral economic principles, specifically the concept of 'mental accounting,' where consumers treat money differently depending on its source or intended use. By automating the savings process, the program reduces the mental barriers to saving and taps into the cognitive bias of 'set it and forget it,' which can lead to increased savings rates without active effort from customers.

The reported discomfort with emergency savings among U.S. adults, as per the Bankrate survey, underscores the potential psychological benefits of the program. By providing an effortless way to save, Round-Up could alleviate some of the stress associated with financial planning. However, it's important to consider the opportunity cost for customers who might have invested the saved funds for potentially higher returns.

It's also worth noting the generational divide in savings behavior, with Gen Zers less likely to have emergency savings compared to Baby Boomers. This demographic insight could guide the bank's marketing strategy and product development to cater to different age groups more effectively.

Banking Industry Analyst

The incremental growth in savings captured by Simmons Bank's Round-Up program is a microcosm of a larger industry trend towards digital banking solutions that promote financial health. The program's success must be contextualized within the competitive landscape of fintech innovations and other banks' saving tools. The ability of such programs to attract and retain customers is a key differentiator in the banking sector.

While the $5.5 million saved represents a relatively small portion of the bank's total deposits, it indicates a successful adoption rate among its customers. This adoption is a critical metric for assessing the viability and scalability of financial products. Furthermore, the engagement of over 26,400 customers demonstrates the program's reach and potential impact on customer satisfaction and trust.

As the banking industry continues to evolve, the role of customer-centric products that leverage technology for financial empowerment becomes increasingly significant. The long-term implications for the bank include not only the potential for a more stable deposit base but also the positioning of Simmons Bank as an innovator in customer financial health.

 Simmons Bank Round-Up program streamlines saving for customers

LITTLE ROCK, Ark., Dec. 20, 2023 /PRNewswire/ -- Simmons Bank announced today its automatic savings program, Round-Up, allowed customers to save nearly $5.5 million during the first eleven months of 2023. More than 26,400 customers utilized the program during this period. Compared to the same timeframe in 2022, dollars saved increased by nearly 6 percent.

According to a Bankrate survey released earlier this year, 57 percent of U.S. adults are uncomfortable with the amount of emergency savings they currently have to cover three months of expenses. Nearly one in four (22 percent) of U.S. adults have no emergency savings at all, the second lowest percentage in 13 years of polling. The survey also noted that almost one-third (31 percent) of Gen Zers (ages 18-26) do not have emergency savings – more than twice as many as the 15 percent of Baby Boomers (ages 59-77) who have no emergency savings.

"Successful saving is all about the habit. Simmons Bank Round-Up Savings program provides automated savings for our customers, making it easier to consistently contribute to their rainy day or savings goals," said Joshua Jensen, chief deposit officer at Simmons Bank. "Our Simmons Bank Round-Up savings program helps customers eliminate the time and effort to save, by putting it on 'auto-pilot,' and adding to their savings with each debit card transaction."

Established in 2014, the Simmons Bank Round-Up program is designed to reduce the effort needed to save by automating the process when customers use their debit card to conduct a purchase. With each debit card purchase made by a customer who is enrolled in the program, Simmons Bank rounds the transaction up to the nearest whole dollar and deposits the "change" into a Simmons Bank savings or checking account of the customer's choice.

Simmons Bank
Simmons Bank is a wholly owned subsidiary of Simmons First National Corporation (NASDAQ: SFNC), a Mid-South based financial holding company that has paid cash dividends for 114 consecutive years. Simmons Bank operates 232 branches in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas. Founded in 1903, Simmons Bank offers comprehensive financial solutions delivered with a client-centric approach. In 2023, Simmons Bank was recognized by Forbes as one of "America's Best Midsize Employer" and among the "World's Best Banks" for the fourth consecutive year. In 2022, Simmons Bank was named to Forbes' list of "America's Best Banks" for the second consecutive year. Additional information about Simmons Bank can be found on our website at simmonsbank.com, by following @Simmons_Bank on X (formerly Twitter) or by visiting our newsroom.

View original content to download multimedia:https://www.prnewswire.com/news-releases/simmons-bank-helps-customers-save-nearly-5-5-million-in-change-302020415.html

SOURCE Simmons Bank

FAQ

How much did Simmons Bank customers save in 2023 with the Round-Up program?

Simmons Bank customers saved nearly $5.5 million in 2023 using the Round-Up program.

How many customers utilized the Round-Up program in 2023?

Over 26,400 customers utilized the Round-Up program in 2023.

What percentage increase in savings was observed in 2023 compared to 2022?

There was a nearly 6% increase in savings in 2023 compared to 2022.

What percentage of U.S. adults lack sufficient emergency savings according to the Bankrate survey?

According to the Bankrate survey, 57% of U.S. adults lack sufficient emergency savings.

How many Gen Zers have no emergency savings according to the survey?

The survey revealed that almost one-third (31%) of Gen Zers have no emergency savings.