How FinTech Will Lead Financial Literacy in Children

 

At first, children may not seem like a segment of the market FinTech should approach. After all, kids don’t have jobs or disposable income, so why would the effort prove fruitful?

In reality, however, children spend over $50 billion annually. As many are taught the importance of money early on, providing them services tailored to their needs means you are introducing yourself to the future powerhouses of the marketplace early on and likely cultivating a sense of brand loyalty. (Over 25% of brand loyalty carries over from childhood to adulthood.)

FinTech does not overlook the importance of the youth market and understands the importance of teaching children about money and finance. By providing them with services tailored to their needs, children start the groundwork needed to become financially responsible members of society.

Osper is one such company tailoring its services to the youth market. Calling itself “Mobile banking for young people,” it’s a pre-paid debit card and app that is available for children as young as 8. Unlike traditional bank accounts, Osper provides parents the opportunity to control how much gets spent and which merchants the children can patronize, allowing the children a chance to gain a certain degree of independence while parents still know where the money is being spent. Also, the card is set up to not work in age-inappropriate sales (casinos, bars, massage parlors, etc.), creating another level of protection for parents who want to give their kids a level of independence but worry about their choices.

The Australian startup Pennybox is another company that understands the importance of the youth market. Cofounded by Reji Eapen and Adam Naor, Pennybox is an app that allows children to track and save their pocket money. Parents can log in and list chores with the corresponding reward, with the money being added to the child’s account once the chore is completed. Children can track how much they are earning and request a cash out when they want the funds.

Going further than just teaching the younger generation about saving, future versions of Pennybox will include an option that allows kids to set aside a portion of their earnings for a charitable cause. An app that teaches kids both financial smarts and a sense of charity. What could be nobler than that?

I know the importance of financial literacy and, with two young children of my own, I am grateful to see the work FinTech is doing to create financial programs for the younger generations. These programs teach children vital skills that they can continue to hone as their access to money and the marketplace increase. They will grow into financially-sound teens and adults, adding to their financial knowledge as the years go by (as it should be done).