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SmartyPig makes a Big Oink!

As most of you know, I’m always on the scout for new stuff in banking and SmartyPig is one of my favourite stories.

A social saving service designed for social networks, they’re a great little outfit and spoke at the Financial Services Club’s American Retail Banker’s forum I arranged last November.

Now, they’re going from strength-to-strength with core deposits for West Bank, SmartyPig’s banking partner, rising from about $10 million in February to more than $100 million now.  Deposits should top $500 million by the end of the year, according to SmartyPig’s co-founder Jon Gaskell.

Then, in the latest twist, SmartyPig have a billionaire benefactor in the form of Texan B. J. ‘Red’ McCoombs.

Why has Mr. McCoombs come on board?

Because “the technology that they have developed, and it’s already proved itself, could handle 5,000 accounts or it could handle 5 million accounts”, says Mr. McCoombs.  “In essence, you can pay the customer more for the deposits because it
doesn’t cost you as much to process and manage them.” 

He goes on to emphasise that “they have produced the technology that is driving an opportunity the likes of
which we seldom see.”

As I wrote back in December:

“SmartyPig takes the social lending model and applies it to savings.

“The way it works is that you setup an account and create a savings
goal, such as saving for a car or a college education or to pay off a
mortgage.  As you save towards your goals, you tell the world by
placing the SmartyPig widget on your social network page, blog or
website.  Lo and behold, all your friends and family can contribute
towards your savings goals.

“This is very friendly and very family oriented.

“As a result, SmartyPig had customers in all 50 states within three
months of launch in the USA are now partnering with other banks, such
as ANZ, to launch a white labelled service in Australia.”

SmartyPig are based in Des Moines, Iowa, USA, with just 15 employees and describe themselves as “an online savings tool that works with a
bank to allow account holders to make their savings goals public.”

Watch out traditionalists.  The march of social finance move up a gear.

Postnote: has anyone noticed SmartyPig’s Twitter contest?  Smart!

About Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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