I love innovation, particularly when it takes place in the financial services industry. It's what prompted me to write my most recent report, Financial Technology Startups: Giving Banks a Run for Their Money. I have been following the activities of SmartyPig for some time now, and I must say that I am taken by their approach. Deposits are held at West Bank (FDIC insured) for US customers, and at ANZ for Australian customers. In addition to the high interest rate they offer, SmartyPig takes advantage of social media and networking.

• SmartyPig takes advantage of social media. The firm makes excellent use of Twitter, Facebook, Vimeo, etc. to get the word out, provide demos, keep in contact with customers, and recruit new ones. They run frequent contests on Twitter, and maintain a blog that discusses issues related to saving. CEO Mike Ferrari was profiled recently in a BusinessWeek article on CEOs Who Use Twitter.
• SmartyPig facilitates social banking. One of the most interesting aspects of SmartyPig is the ability to publicize your savings goal. If I am saving (for example) for an LCD TV, I can invite my friends and family (by email) to contribute to my goal. Users can also place a SmartyPig widgets on their Facebook or Myspace page as part of this process.

SmartyPig's approach is interesting and different. NetBanker recently reported that deposits in the US have reached $100 million. This is an impressive feat, and is no doubt due in part to the attractive interest rate offered by SmartyPig (currently 2.75%).

Banks have a lot to learn when it comes to social media and banking. SmartyPig is a great example of a non-bank in the financial services space that has integrated social media into it's day-to-day business. I am currently working on a new report on social media in banking. Stay tuned for additional details.