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What banking can learn from the music industry

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You’ve probably never imagined it possible to draw comparisons between Outkast’s “Hey Ya” and personal spending habits. But, it turns out the success of this hit song can provide relevant context for exploring how our brains stick to the patterns we know, especially when it comes to deeply ingrained spending habits.

Machine learning from “Hey Ya” to banking

In “The Power of Habit“1, best-selling author Charles Duhigg shares an interesting story behind Outkast’s hit song “Hey Ya”. Prior to its release, the song was predicted to be a big hit by artificial intelligence experts and statisticians who analyze mathematical characteristics of songs, such as tempo, pitch and melody, among other things. 

But, the song bombed during the first few weeks it was played on the radio, as listeners would just click off or tune to other radio stations. As Duhigg goes on to explain, it wasn’t that “Hey Ya” was bad, or what machine learning practitioners like to call a “false positive” in their predictive models, the problem was that it was not familiar.

The human brain craves familiarity. If the song sounded like other things we liked, then we would listen. This trend is similar to behavioral habits. MIT researchers led by Ann Graybiel show that “our daily routines become so ingrained that we perform them automatically”2

This becomes even more crucial when we’re talking about financial behaviors, especially bad ones, as these choices can affect us for the rest of our lives. The more accustomed we become to performing a certain financial behavior, such as immediately going on a post-paycheck shopping spree instead of contributing to savings, the more automatic the behavior becomes.

The truth is that many of us fall into this unfortunate cycle, and a large percentage of Americans struggle to save even $400 for emergencies. For many people, saving money is just not part of their regular routine, which makes creating smart spending habits that much more difficult.

Building better money habits

At Varo, it’s our goal to help our customers develop healthy financial habits that last over time. Our aim is to provide customers with the tools to develop goal-oriented financial habits that are planned, purposeful, and easily replicated. 

This is especially important given that we want to help our customers create a financial lifestyle that prevents small mistakes from accumulating over time. We want to make sure the messages we deliver are always easily actionable and timely, and we also strive to build collective wisdom across transactional and personalized behavior.

Just as in “Hey Ya,” radio DJs realized that they needed to make the song feel familiar by sandwiching it between songs that were considered “sticky,” meaning songs that listeners never changed the dial from. At Varo, we want to make sure that the recommendations and financial habits we encourage our customers to develop feel right for them.

Getting into the habit of saving

As with in most things in life, preparing ahead helps, and we strive to help you reach your savings goals faster. A high yield Varo Savings Account offers a 3.00% Annual Percentage Yield (APY), no fees, and easy auto-saving tools to help grow your money3

Varo’s Save Your Pay is a tool that automatically deposits a percentage of what you earn into your Varo Savings Account. The percentage you want to save is up to you. Varo’s Save Your Change makes saving small amounts easy and acts like a digital piggy bank that rounds each purchase to the nearest dollar, then transfers it into your Varo Savings Account.

So, join us in making smart financial habits part of your routine. Whether it’s building an emergency fund, paying off debt, saving for a down payment on a house, or putting money towards retirement, we believe in everyday banking that puts you in charge and gives you more ways to take control of your money.

1 Duhigg, Charles. The Power of Habit: Why We Do What We Do in Life and Business. New York: Random House, 2012.


3 To open a Varo Savings Account all you need is a Varo Bank Account. Start earning 3.00% Savings APY, then qualify to earn 5.00% APY on your balance up to $5,000.00 for next month by meeting these two requirements this month: (1)Receive direct deposit(s) into your Varo Bank or Savings Account, totaling $1,000 or more; and (2) End the month with a positive balance in both your Varo Bank Account and Savings Account.You’ll continue to earn 3.00% APY on any additional balance above $5,000.00. The requirements must be met within the Qualifying Period begins on the first calendar day of the month and ends at close of business (4:25 pm MST/ 3:25 pm MDT) on the last business day of the month. Qualifying direct deposits are electronic deposits of your paycheck, pension or government benefits (such as Social Security or unemployment) from your employer or government agency, into your Varo Bank Account and/or Savings Account. Tax refunds and government stimulus payments, Person-to-Person payments (such as Venmo), and funds deposited using a Varo routing number are not considered a direct deposit.

Unless otherwise noted above, opinions, advice, services, or other information or content expressed or contributed by customers or non-Varo contributors do not necessarily state or reflect those of Varo Bank, N.A. Member FDIC (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s) other than Varo.


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