New Acorns feature “learns” your spending habits to help you save
Micro-investing app Acorns will utilise machine learning with its new "My Finances" feature, released today.
Acorns has today announced a new feature exclusive to Australian customers that provides personalised insights into their spending and saving habits. Using machine learning, the "My Finances" feature will be able to discern your spending patterns, automatically categorise your transactions and notify you if you're likely to spend more than you have in previous months.
A new kind of budget
Acorns Australia CEO George Lucas says that the idea for the feature was born out of Acorns' users themselves.
"We're already doing round-ups and collecting a lot of transactional information, and our clients started asking for pie charts and bar charts for expenditures. And we said could do that, but we can use machine learning," he said.
"We can make the experience as easy as possible because part of saving is also learning about where you’re spending your money and seeing if you can pick up where you may be wasting your money to therefore help you save more. And that’s the approach that we took."
Research from Acorns Australia has found that three-quarters of millennials surveyed usually make sacrifices towards the end of their pay cycle to make ends meet and while close to 70% say they have a monthly budget, only 49% stick to it.
Lucas says that the main advantage "My Finances" will have over other budgeting apps is its artificial intelligence.
"For most of the budgeting apps that exist now, you have to enter a budget," he said. "With Acorns, it actually goes back through your transactional history and will work out, based on your previous spending habits, what your spending habits are going forward."
Categorisation and personalisation
Functionality-wise, the "My Finances" feature operates as part of the app for users who are currently using Acorns round-ups. That is, they have linked their bank account to the platform. Lucas has said that the new feature will categorise 85-90% of the user's transactions "straight off the bat", but users can also personalise this further.
"If you want to improve the categorisation, you have the ability to go and re-categorise things or categorise items that it hasn’t been able to work out," he said.
Users will not only receive a personalised cash flow forecast presented to them graphically within the app, but they will also be able to personalise the notifications they receive.
Another feature that will be released exclusively to Australians is the Carbon Footprint estimator. Beta testing showed that this feature received a positive response from 80-90% of testing users.
The tool calculates a user's carbon usage based on their spending activities and has been approved by the Emerald Club, Australia's largest socially-responsible investment platform. Lucas says that he hopes Acorns will also be releasing one of its most requested features, a socially responsible portfolio, by the end of this financial year.
The first of many?
Lucas has said that "My Finances" is just the beginning and that the new features are "never going to stop".
"When we built this capability, we built it so that we were able to link natural language processors and chat machines into it so that one day you might be able to Facebook message the app and ask it if you can go out for dinner that night and it will look at your expenses and say, 'No, you can only go to the golden arches.'"
While Lucas assures us that these kinds of features won't be on the horizon for at least another 12 months, the architecture Acorns has built has taken these ideas into account.
"Doing a budget is great, but it’s not necessarily going to get you there," Lucas said. "Something that is real-time and notifying you... is probably a better approach, we think."