Jerusalem, 19 May, 2025 (TPS-IL) — Artificial intelligence can help consumers avoid overdraft fees — if the messaging is right and the users are in a position to respond — according to an Israeli study released on Monday.
The research by the Hebrew University of Jerusalem and the financial software firm Intuit presented hard evidence from a real-world experiment involving over 39,000 users of Mint, a personal finance app popular in the U.S. and Canada. The study tested whether AI-generated email reminders, strategically timed and worded, could reduce the likelihood of users overdrawing their bank accounts.
“Our study provides evidence that AI-based, tailored communication can positively influence financial behavior—but it must be accessible and actionable,” said Prof. Orly Sade, Dean of the Hebrew University Business School and one of the study’s co-authors. “Simple, timely messages have the power to help people make better decisions, but we also need to consider broader systemic barriers for those in more challenging financial situations.”
The results, published in the peer-reviewed Management Science, were striking. Even basic alerts led to fewer overdraft incidents. The most effective messages — those that emphasized potential loss — cut overdrafts by 9% the following week. On average, users saved $25 over four months just by receiving a simple, well-timed reminder.
The study also revealed important limitations.
Users with mid-to-high incomes and decent credit scores were the most likely to benefit. In contrast, financially vulnerable users such as individuals with low liquidity or maxed-out credit were far less responsive.
The experiment used an AI model to predict when a user might soon incur an overdraft fee. If flagged, the user received one of several types of reminder emails. These messages varied in complexity and tone. Some emphasized gains (“Save money”), while others focused on avoiding losses (“Avoid overdraft fees”).
The loss-framed messages proved significantly more effective than their positive counterparts, reinforcing long-standing behavioral science theories about the power of loss aversion. And crucially, the simpler the message, the better it worked.
“This isn’t just about alerting people—it’s about designing communications that actually change behavior,” said Daniel Ben-David of Intuit, another co-author of the study. “We saw that even a subtle difference in wording can impact whether someone takes action or ignores the message.”
The findings offer actionable insights for banks, fintech companies, and policy-makers. For firms designing financial tools, it suggests that small tweaks in user communication can have measurable impact.
But the study also signals a warning: nudges work best for people who already have some financial breathing room.
Said Sade, “Technology and behavioral science together can do a lot—but we have to ensure they’re designed with inclusion in mind. Otherwise, the people who need help the most may still be left behind.”
