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Across Europe, banks are taking social responsibility more seriously. A recent report by the European Banking Authority found[1] there are more than 120 partnerships between banks and government agencies across the EU designed to improve financial literacy in adults and children.
Kids’ digital wallets are more than just educational
When it comes to children specifically, learning by doing – in the shape of managing money through a digital wallet supervised by parents – helps them learn the basics of money management.
But these family wallets can do more, both for families and for the banks that issue them.
Educating tomorrow’s customers – today
A new white paper from European payments solutions leader NETS explains the advantages of family wallets from a user point of view – and as a means for banks to extend their product portfolio and enhance loyalty in next-generation customers.
Given that young people are the most enthusiastic adopters of new payment technologies[2] and are more likely to be customers of so-called “neobanks” than any other demographic, a family wallet can act as an investment in the future of your retail banking business.
Family wallets – building loyalty and financial literacy in tomorrow’s bank customers explains how these products work, and outlines how easy it is for banks to integrate a family wallet into their existing mobile and internet banking offerings via a tailored Software Development Kit (SDK).
Featuring a parental app that provides an overview of children’s spending and enables parents to limit the amount children can spend and/or block certain websites, family wallets also include a children’s app with three functions – pay, earn and save.
These functions help children to understand the relationship between earning, spending and saving, while stimulating conversations between parents and children that foster financial literacy and financial responsibility.
The children’s app also allows the user to be onboarded as a separate customer of the bank subject to parental approval, further cementing the relationship between a bank and a new generation of customers.
“Offering a family wallet makes good business sense for banks – as well as being socially responsible.”
In parallel with the move towards digital onboarding, the EU’s second payment services directive (PSD2) has enabled a wider range of payment options such as Request to Pay (RTP), Buy Now Pay Later (BNPL) and Account to Account (A2A) solutions.
Because these solutions can operate outside traditional card rails, they present a challenge to banks’ current sources of revenues – and study after study shows[3] that young people are the most enthusiastic adopters of these new technologies.
As we argue in our white paper, family wallets shore up customer loyalty and constitute a valuable addition to your digital product portfolio.
With personal finance moving further to online delivery over the next five years and cash use declining, educating children in online financial management has never been so important.
Family wallets provide children with a safe, fun environment for them to learn how to manage their money while spending responsibly.
They also offer parents peace of mind, knowing their children are at lower risk of fraud and scams as they can monitor their spending and set limits.
From a bank’s point of view, family wallets make sense from the perspective of both social responsibility and bank profitability, widening the bank’s product portfolio while growing brand loyalty and revenues in a rising generation of digital-native consumers.
Download our new white paper now to learn more about why your bank should offer a family wallet product
[1] See The European Banking Authority: “European Financial Education Report 2020”
[2] See Euromonitor, “The Disruptive Potential of BNPL in Western Europe”
[3] See Momentive/SurveyMonkey, “The Future of Banking Goes Digital”
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