FinTech News

Acorns Launching “Money Lab” to Find Financial Wellness Solutions

If you follow FinTech, there’s a good chance you’ve heard of the micro-investing app Acorns. Using painless savings methods such as their “Round Ups” feature, Acorns aims to make investing easy and help its users to improve their finances Now the company is looking to further that goal with the launch of Money Lab.

Today at Yahoo! Finance’s All Markets Summit, the company announced that it was bringing Shlomo Benartzi of the Behavioral Decision-Making Group at UCLA Anderson School of Management on board to serve as Chair of the Behavioral Economics Committee. In this new role, Benartzi will gather a team of behavioral scientists to establish what Acorns is calling Money Lab. According to the company, Money Lab is “an initiative that aims to create, test and build solutions to increase the financial well-being of the up and coming in America, with a special focus on savings and investment.”

Speaking on the promise of his new role, Benartzi said in a statement, “I’ve spent my entire career trying to answer a simple question: how can we get everyone to make better financial decisions about the future? At Acorns, I have the opportunity to apply my learnings at scale and nudge millions of customers to make decisions that will improve financial outcomes — everyone deserves to have a better and safer financial future.” Acorns CEO Noel Kerner also spoke to what the company hopes to accomplish with Money Lab, stating, “We’ve solved the first big societal problem: getting people to start investing. Now we’re focused on how we can combine insights of psychology and economics to create an entire financial system that helps people save and invest – our Money Lab can really make an impact.”

Benartzi has already had the chance to explore financial behavior via the Acorns platform, asking users if they’d rather save $5 a day, $35 a week, or $150 a month. Despite these totals being nearly the same, a mere 7 % selected the $150 a month option while 30% choose the $5 a day route. Responding to these findings, Benartzi explained, “What accounts for this huge shift in preferences, even when all the choices are equivalent? Saving $5 a day makes us think about skipping a Starbucks latte (that seems doable), while $150 a month makes us think about car payments, which is a much more daunting amount to give up.”

With the launch of Money Lab, Acorns is continuing a popular goal among FinTech firms: finding ways to improve the financial lives of the “99%.” Moreover, as Benartzi’s first study highlights, Acorns seems to already be on the right path as it makes saving and investing less intimidating by breaking these actions down into simple micro-transactions. Hopefully future findings from Benartzi and Money Lab can not only help inform future features from Acorns but can also assist other FinTechs in helping a new generation manage their finances.

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