Guest blog: FinTech for kids develops the next generation of smart savers
Anyone with young children knows how money tends to burn a hole in their pocket. The weekly allowance has hardly been handed over or has it already been spent. These days on Roblox! But helping children understand more about saving and the value of money has never been more important.
A recent YouGov survey found that 25% of children as young as six are more concerned about money because of the pandemic; 77% of children believe that financial knowledge will help them when they are older.
“Children’s behavior is shaped at age seven,” explains Sarah Marks, CEO at redstart, a charity founded by investment consultancy Redington. RedSTART has been passionate about the benefits of financial education from an early age.
Sarah and her team in their RedSTART program begin talking to kids about money from the daycare age onwards and have committed to seeing them every year until they leave primary school. “We want to embed good habits, an understanding of how money works and a confidence to deal with it, that becomes second nature,” Sarah says.
Empowering the next generation with fintech for kids
The RedSTART team has developed a banking app to explore children’s emotional attachments to money. Sarah tells us, “No matter how many times we visit, we can’t be with the kids every day to remind them of the concepts we’re teaching them; earn, budget, save and invest, but the banking app can do that.” Through gamification, the children earn rewards to encourage them to practice addition, subtraction and percentages.
Understanding real user needs and meeting those needs through an intuitive user experience and interface are essential to making apps successful. How kids interact with their apps is very different from how their parents act.
Ed Whatton, the founder of ChildrenCoa new savings platform that makes it easier for families to set goals and understand the importance of saving recognizes these qualities.
“At KidsCo we develop a platform that makes saving fun, educational and goal-oriented. We keep this important design challenge in mind and focus on using a Family Centric Design (FCD) principle,” explains Ed.
FCD deals with major life events, goals, and constraints within families or other intimate, long-term communities that need to be addressed in a (digital service) design process to create meaningful use case scenarios. At KidsCo, every prototype they make is tested with families and compared to family-friendly technology. Creating a way to challenge how consumers think they should save in a silo and make it more of a family activity to grow and learn together.
KidsCo’s platform aims to solve some of the known pain points of having a kids savings account right now:
1. Open a children’s savings account.
Currently this can take a long time, it is confusing and the child is not taken.
2. Saving for a meaningful goal/saving goal/purchase.
Today, parents base it on what they would have wanted with no real goal in mind and how this might change over time. The focus needs to shift to setting achievable goals, goals, and rewards that kids can engage with.
3. Teach children the value of money and saving in a digital money-free world.
This usually does not happen from a young age and the importance of saving/investing is not taught as much as in other cultures worldwide.
4. Make sure that savings are not spent.
Parents immersed in their child’s savings see no short-term effect. Goals and future forecasts can make them more aware of the consequences. (The famous IOU in Mom and Dad’s piggy bank should probably stop!)
Kids-Co has interviewed families of different backgrounds, ages and beliefs and this has shown that there is a constant need for shared family goals and an easier way to stay on top of savings. With an ever-changing economy, families are concerned that they don’t know how much their child will need in the future and how to achieve these savings goals.
The road to success is rarely straight forward. During the build, test and learning phase, Ed and the team developed a more focused family goals and educational vision. With more research showing that times have changed and that digital is an important learning and development tool, it’s time to use it to develop a family’s time together.
As more apps for kids are launched and established players like GoHenry, Rooster Money and now Revolut are targeting this market, hopefully this will only help to improve kids’ understanding of money and create longer term traits that empower them. will come in handy later on.
Thanks to David Henderson, Behind Login for the guest blog on fintech for kids!
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