Q: Congratulations on winning Canstar’s Bank of the Year in Junior and Youth Banking! How has CommBank stayed ahead of the chasing pack when it comes to kids’ banking?
A: Commonwealth Bank has a strong track record of providing widely-respected financial education programs to children. Our School Banking program has been teaching children lifelong money and saving skills for more than 80 years.
We are also the first Australian bank to launch a banking app for youth – which was piloted in 2016 – to help parents teach their kids about saving and responsible spending in a fun and secure way.
Our Start Smart program, which is separate to School Banking but also offered in schools, is a free financial literacy program that provides engaging and interactive workshops, run by expert facilitators, to primary, secondary, and VET (Vocational Education and Training) students. Workshops cover age-appropriate concepts mapped to the school curriculum.
The accounts that we offer for this customer segment have no monthly account fees and include a savings account (Youthsaver account), which rewards regular savers with bonus interest, and a transaction account (Smart Access account). The transaction account comes with a Keycard and the protection of parental controls, which let you set spending limits and locks on the account.
Commonwealth Bank also provides a plethora of useful information and activities, for both children and parents, on CommBank’s website through the Dollarmites Club and The Beanstalk hubs.
Research tells us that most children form money habits by the time they are 7 years old. We believe a financially-literate community leads to a more prosperous society, so it is crucial for children to develop skills and capability from an early age.
Q: Have you found that kids are taking more or less of an interest in saving and finance these days? For example, are young people still coming into branches and using ATMs?
A: Generally speaking, over the last decade we’ve seen a steady decline in the number of transactions completed at our ATMs and branches.
This is a direct result of the rise in cashless transactions, and those completed through digital channels such as mobile and internet banking. As at December 2016, 5.5 billion transactions are completed through the CommBank App every week, up from 3.8 billion from the year before.
Today, almost 6 million customers are using digital channels, a quarter of new accounts are opened online, and more than 50% of total transactions are completed digitally.
With the digital revolution already happening across the board, no doubt future generations will continue to grow this trend.”
Q: Research from PISA (Programme for International Student Assessment) shows that financial literacy among Aussie kids is falling. Have you noticed any trends that would support or deny this?
A: Our own research tells us that nearly half of Australian parents struggle to teach their children the concept of money, especially as our society becomes increasingly cashless.
In particular, 5- to 6-year-old children find it the most difficult to grasp the concept of digital money, and it gets easier as they get older. However, even 11- and 12-year-old children find it challenging.
This is why Commonwealth Bank has an ongoing commitment to take an active role in building financial literacy in children, especially when it comes to healthy saving and spending habits.
Q: What is CommBank doing do combat this slump in kids’ financial knowledge?
A: Commonwealth Bank’s School Banking program provides young children with an understanding of core financial values and money management skills – to help them take their first steps towards good money management and regular savings behaviour.
The program is designed to educate school children about the importance of saving money on a regular basis, and motivate them through a rewards program that encourages regular deposits.
It has been supported by an overwhelming number of parents, schools, and students.
Complementing School Banking, Start Smart is an award-winning educational program of free, interactive, and engaging workshops designed specifically to help young people understand the value of money and develop the confidence and knowledge they need to make smart decisions about earning, spending and saving.
Our Dollarmites Club, which can be accessed through CommBank’s website, provides games and activities designed to teach children about the importance of saving.
The Beanstalk, also available on CommBank’s website, is an online resource for parents with useful tips to help them teach their children about money.
Q: Following this, what would you say is the best way to engage young people in learning about financial topics?
A: Our programs really complement each other. Start Smart delivers age-appropriate financial education and tips for kids in a fun way, through face-to-face presentations.
School Banking gives them the opportunity to practice real banking, set goals (and get rewarded), and take that first step of making responsible financial decisions by deciding to save money on a regular basis.
On top of that, our online resources provide additional information for kids and guidance for parents on how to engage their kids on this topic.
Q. Technology is set to play a huge role in banking in the coming years. Just how important is the digital banking space when it comes to junior and youth banking?
A: Our research shows almost all kids have access to a smart electronic device and are used to interacting digitally on a daily basis. Despite this, our research shows their understanding of digital money is low, and at the same time parents struggle to get them to understand.
This is why we saw the opportunity to engage younger customers through a channel of their choice, to ensure they know how to manage money in a digital world.
Q: What does CommBank currently offer in the digital banking space that other competitors do not? How do you make it easier for kids to manage their money online?
A: In 2016, we piloted our CommBank Youth app, a digital tool that provides parents with the opportunity to teach digital money skills, and gives children the ability to make independent saving and spending decisions by banking online.
Being able to see their account balance, and see the impact of their cashless transactions, makes it easier to learn about the concept of digital money.
In addition, our pilot testing has revealed that having a visual representation of how much they have left to save for a bike, for example, makes them more motivated to save, which encourages healthy financial habits.
Veronica Howarth is the Head of School Banking at Commonwealth Bank and has previous experience as Commonwealth’s Head of Sales from 2006 to 2012.
To compare Commonwealth Bank youth banking products, as well as those from other providers, you can use the Canstar website to find the right option for your child.