When we think of doing better with managing our personal financial situation, the “better” part typically comes with the picture of more technology, more data or just more external “stuff”. Yet, there is plenty of evidence that hardwired cognitive and behavioral biases are one of the biggest barriers and challenges preventing us from managing money better.

Instead of throwing more technology as the answer, here are five innovative offerings that have cleverly sought to bend the quirks of the human mind to benefit customers, rather than trying to exploit them for their own economic benefit.


Qapital is a mobile banking app started by two Swedes. The app has the typical features you might expect any up-to-date personal finance app to have: tracking spend, income, bank balances, etc.

Where the app shines is in its innovative use of behavior science to trigger greater saving, better awareness of the opportunity cost of money, and more built-in triggers to protect customers from their own worst impulses.

Users can set up an FDIC-insured bank account that’s Qapital-branded to house their new-found savings. The next step is where the app gets smart – the app allows the user to set up goals for which they’d like to save money (for example, an exciting vacation, replacing a home water heater, or anything else). Putting a name on the goal has been shown to provide greater urgency and saliency to any goal – making it more immediate.

But here is the most exciting innovation, though: once the user sets up their savings goal, they can then set up IFTTT rules, (which are “If This, Then That”), that will painlessly and automatically transfer a set amount of money from their banking account into the Qapital bank account every time the event they set up occurs. For example, if a user is a big latte fan, but is also trying to save for a vacation, she can set up a rule that every time she buys a latte at Starbucks, the app will transfer, say $3, to her vacation fund.

Needless to say, the money is still coming out of her own funds, but she’s a lot more likely to save up and less likely to spend money she doesn’t see (although she has it), when it’s swept away from her sight in small but frequent doses.

The added bonus in my view is that Dan Ariely, the esteemed behavioral science professor at Duke, is the Chief Behavioral Economist at Qapital – what I know of his work gives me abundant assurance that this company means well.

Find the app here.


If there is one consistent theme that has refused to budge over decades, it’s this: the notion that “investing” isn’t for women, or those without a “lot” of money. Add to this the confusing and intimidating jargon that you typically see on any investment company or mutual fund site, and it’s enough to send any novice scurrying for the comfort of a latte in next to no time.

Stash is an innovative new startup that aims to break many of these industry shenanigans. In designing its offering, the company has leveraged many themes of behavioral science into a seamless and painless introduction to investing.

For starters, anyone can start investing for as little as $5 – the company makes equity ownership possible with such small amounts by offering fractional shares in large companies. With such a low bar, it’s hard for even the most cash-strapped millennial to argue that they can’t “afford” to invest money.

To make stock selection and diversification even easier, the app provides baskets of stock arranged by catchy and easily-understood themes, rather than grouping them by yawn-inducing titles like “Small growth stock technology fund”. For example, some stock categories offered are: Colossal China, Equality Works, American Innovators, and Home Sweet Home.

The app then leads the user up the ladder of learning and sophistication with well-timed tips, advice and suggestions so they can power up their investing chops faster and with little fear or anxiety.

Another clever use of behavioral science: the app credits $5 to your account for a referral so you can do good and do well for yourself at the same time.

Start stashing away your money here.

Jonathan Brinkhorst


In the sea of savings and banking apps, Earnup comes as a breath of fresh air to a country that’s drowning in debt. It’s a little known fact that most people underestimate the dramatic impact of compounding. This hurts them in two ways because on the one hand, they fail to understand how even small savings over time can add up to big numbers. On the other hand, they miss opportunities to increase loan repayments on debt like credit card debt where the pernicious impacts of compounding interest can whack their debt into much higher levels than merely their spending would.Enter Earnup – the company offers a loan-automation platform that gives a single-point interface to manage all of their loans – whether it be their student loan, car loan or mortgage. Besides simplifying paying off all loans within one single interface, which in itself is a significant bandwidth-clearing move, Earnup also prompts faster loan payoffs by encouraging users to “round up” their loan repayment amounts. The happy result is that they end up paying off their loans much faster than they would otherwise.

The platform is not free, though, which is a small negative in my mind – it costs about $10 a month for a user to manage their loans through this platform. But in comparison to the huge amount of finance charges or interest that the average person in the United States pays, this is small change, literally, compared to the benefits generated.

The fact that Earnup teamed with my favorite behavioral economist, Dan Ariely, in addition to Earnup being the lone loan innovator in this list gives them a place of honor on this list.

Checkout Earnup here.


In the burgeoning field of micro-investing, Acorn is another formidable player that uses a slightly different type of behavior tools to help users save more and invest more money.

The core value proposition of Acorns is that anyone, even with very little money, can start investing today. Once a user signs up for an account, the app rounds up everyday purchases, using the difference to fund their investment account, which is automatically invested into a broad-based portfolio.

What’s impressive with this company is that it has not one but two Nobel Laureates advising it, from two different branches of finance: Richard Thaler, who won the Nobel prize for his contributions to behavioral finance, and Harry Markovitz, who won it for his contributions to portfolio theory.

With two giants like that, it’s hard to make the case that a better way to investing for the brain and the wallet can be easily found!So where do the behavioral insights kick in? And how do they benefit the user?

Research shows that when people are given an option to choose between saving $5 a day or $150 a month, a lot more of them choose the first option, even though the two choices are exactly identical in terms of financial impact!

The app uses this to the user’s benefit, by helping them save their money in small daily increments, rather than in large, less-likely-to-be-chosen lump sum amounts. What’s surprising is that this willingness to put aside $5 a day stayed consistent across people who made $25,000 and those earning $100,000 a year.

Another neat innovation in Acorns is that the company has partnered with 200+ merchants who deposit a small sum into the user’s Acorns account every time they shop there. While the actual financial impact of this can be debated, it’s no doubt a win for users who don’t end up spending more just because “the more they spend, the more they save”.

Find out more about Acorns here.


Rounding up our list of innovative financial offerings is Digit. On the outside, Digit looks very much like your run-of-the mill superpower personal finance app – the ones that can analyze your savings, spending and make you much smarter in no time about how to spend and save your money.

But that’s not the reason this solution made it on this list: the company introduced a far smarter, far more effective tool to help their users protect themselves from themselves. In behavioral science, it’s a well-known fact that our present self is happy to commit our future-self to all kinds of activities and behaviors that we know is good for us – things like getting up at 5 am to workout, saving 10% of our paychecks for the future, etc.

Yet when 5 am rolls around, or the paycheck is sitting fat and happy in our bank accounts, we’re far less inclined to follow through because it’s hard and painful.

But what if the actual behavior is less painful, and can actually be executed quite easily and almost without further action? Then it becomes a whole other ball game with significant upside.

Income tax refunds are the largest non-salary cash that most Americans receive on a regular basis – more than 80% of filers receive about $3,100 in refunds on average. Digit worked with Dan Ariely’s Common Cents lab to design a feature that almost guaranteed that not only would more people follow through on their intention to save part of their refunds, but also save a bigger percentage of it.

Simply asking the user in advance how much of their expected refund they would like to save, and automating transfer of that amount the moment the deposit hits the account, resulted in significantly higher savings from users who opted for this feature. Out of sight was indeed out of mind, but to their benefit!

Find more about Digit here.

Alexander Klarmann

In conclusion

These companies and offerings featured above are no doubt the first wave of pioneers who are leveraging the quirks of the brain to benefit, rather than take advantage of users in financial services.

As behavioral science becomes more mainstream, newer and more effective applications of the findings will no doubt become more widespread and perhaps even more embedded within the mainstream financial services industry – something that hasn’t yet happened to date, but is long overdue.

While that is working its way to a better future, we can only applaud the efforts of pioneers like Dan Ariely and the Common Cents lab who work hard, and with the explicit goal of making behavior science work for the benefit of Americans’ financial well-being.