Talking to Victor Trokoudes About Plum and Virtual Savings Assistance
Can a bot save more money than a person?
Two weeks ago, I wrote a slightly snarky article about money-saving chatbots:
Would You Let a Bot Into Your Bank Account?
We can go ahead and guess these bots’ personalities before we even look at the apps. Plum is obviously the cool one. Her asymmetrical haircut never has a single long strand of hair flipping over to the short side. Chip is Clippy’s annoying younger cousin. He just got his MBA and is ready to mansplain. Cleo — well, these apps are all targeted towards Millennials, so we’re probably all thinking of Miss Cleo right now. RIP.
Victor Trokoudes, Plum’s co-founder and CEO, reached out and asked if I’d like to learn a little more about how Plum worked. (Plum is based in the UK, so it won’t be available to all Billfold readers—but it’s still worth discussing.)
The interesting part of our conversation had to do with the rationale behind Plum and why Trokoudes thought it would be better for users than a traditional savings account. Yes, you’ll get a tiny bit of interest on your savings if you use a traditional savings account, but if you save more money overall through Plum, then you actually have more savings with Plum.
This was something I hadn’t considered, and it’s worth thinking about. If a bot is able to set aside more of your money than you might have saved on your own, is the bot better than a savings account?
Trodoukes and his co-founder, Alex Michael, also tested their theory. Trodoukes saved “what was leftover” in his account, the way many of us do (unless you’re like me and save a flat 10 percent before you spend anything), and Michael used a Plum-like algorithm to determine how much to save.
By the end of the experiment, Michael had saved nearly twice as much as Trodoukes did.
Trodoukes wrote about this experiment for Plum’s blog, highlighting the clear takeaway:
Turns out, Alex had saved nearly double what I had! And without changing his spending habits or even having to remember to put money aside.
So yeah, if you’re not a natural saver or if you are avoiding increasing your savings because you assume you’ll have to downgrade your lifestyle, an app like Plum could help you save more money.
Also, here’s the answer to that other question you’re probably wondering about, courtesy of Plum’s FAQ:
Your savings are deposited in your own wallet operated by MangoPay SA, an EU regulated and licenced financial institution, and held at Barclays Plc. Your savings are yours, and yours alone; we cannot use any of it for our own operations and if we go out of business it will be returned to you.
I am the kind of person who hates giving up control of my finances, which is why I still pay my bills manually and take the time, every week, to transfer 10 percent of my earnings into my savings account. I am not Plum’s target user. But other Billfolders—including Megan Reynolds—have shared how virtual savings assistants like Digit and Acorn have helped them save money.
And if you can really save more with an app like Plum, maybe it is better than a savings account.
What do you think?
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