Teens want financial education as part of their banking services.
With cash almost out of teens’ everyday vocabulary, there’s now an increased need for tools that help these Gen Zers manage and budget their spending habits in a digital setting. Parents want their teens to be aware not only of how much they’re spending but also how they’re spending.
Consequently, we’re seeing an increase in teen banking solutions from all over. Banks like JPMorgan Chase and Wells Fargo are offering teen banking solutions. Revolut launched its subaccount Revolut Junior back in March and added a new savings goals feature to it in October.
There’s also a flood of new banking apps aimed directly at teens, including Step and Copper, which launched their services this year. These new apps could change the way teens bank — both now and in the future.
It’s not just parents who are turning to these apps. Teens themselves are expressing interest. 63% of Gen Zers would show preference to financial institutions that incorporated financial literacy into their services, according to a study by Raddon, a research and analytics company.
[CEO of Copper:] “Gen Z, unlike prior generations, is hyper aware of the financial missteps of past generations… Parents and teens alike acknowledge that current banks don’t teach their generation about money, in this critical time before they become adults.”
With new banking apps designed for teens, digital banking could become more ingrained in teenagers’ everyday use. Teen banking products and services could also impact how they see traditional banking altogether.
“The need is real and the solution from the big banks just isn’t cutting it.” said Copper’s Behringer.
But incumbent banks have also been showing interest in providing more teen-focused checking accounts. These banks offer their own teen banking solutions, as well. Chase offers Chase First Banking, a checking account for kids ages 6 and older that allows parents to track spending.
Wells Fargo launched its Clear Access Banking product in August. The banking solution is designed to be transparent and easy to understand…
“We understand that building relationships with customers at an early age helps to maintain and strengthen our relationships with our customers as they become older and go through different stages of life…”
Wells Fargo and JPMorgan Chase were also among the investors behind teen-focused challenger bank Greenlight’s last round of funding. One of the leaders in the teen banking industry, the challenger bank hit almost 1 million users back in March. It raised $54 million dollars in this round of funding.
[Step:] “Teens really want to set a budget, they want to be responsible with their money, but they don’t have the tools to do it, because no one talks about it at home, and no one talks about it in school.”