Gen Z is the first generation growing up around fintech, with most being introduced to money management apps from 7 or 8 years old. But by what it seems, many banks, traditional and challenger are going to miss the boat with Gen Zs.
The under 18’s will reshape banking. Our mission here at Moroku is to ensure that the banks that do want to re-invent for the future are well equipped to do so.
Liliia deCos’s thesis from Turku University concludes that it’s really important to teach children about money from early childhood. Her analysis showed that the majority of children do not receive financial education at school and that there is a big opportunity for financial institutions to enter the market and fulfill this gap.
Her research showed that the reasons for limited knowledge about how money works amongst adults and children were boredom, lack of motivation and engagement. Liliia goes on the conclude that public opinion regarding the use of game design in education is very positive and people would gladly accept the opportunity to teach their children money management using a gamified solution.
Her interviewees acknowledged that their children play various games. Moreover some interviewees encourage their children to play educational games, stating, “…. it is more effective to make children learn via games than via standard exercises”. The data supports the notion that banks and other financial education providers have tremendous opportunities in this area.
Planet Orange is a website developed by ING Direct for the purpose of helping school students learn some basic money skills. Through a series of “missions” (games) to Planet Orange students gain or lose money. Students can design an avatar to represent themselves on their missions. The students gain invest or spend the money they gain to match their budgets and reach their goals.
Liliia reviewed ING’s investment in Planet Orange and the bank’s decision to invest in the idea based on following reasons:
– The opportunity to bank a previously un-banked segment of the market before competitors, resulting in growing its customer base and generating future revenues
– A possibility to cross sell and up sell products and services to the family members of the “Planet Orange” users
– Creating a positive image of financial solution provider
– Gaining loyalty from the next generation of customers
– Increased reputation
The results from the research support the investment decision. All interviewees admitted that they would perceive banks that provide financial education to children more positively. Moreover interviewees would consider opening savings account from these banks or even switching their banks in order to access the “game”.
The results obtained from the surveys revealed that the majority of respondents would perceive such banks as “very positively” (49%) or “somewhat positively”(42%). This shows that the surveys are in line with the interviews and the banks reasons for investing in similar projects.
In the example of “Planet Orange”, ING bank insists that in order to access the financial educational game it is compulsory to open a children’s savings account. Based on this the researcher decided to find out what the respondents opinions on savings accounts for children are in general. The results showed that respondents’ attitude towards savings accounts for children is very positive and that they see a whole range of benefits from opening one. The biggest benefits according to respondents are
- learning the value of saving money (23%)
- creating a savings mentality (18%)
Even though ING makes opening a savings account compulsory it shouldn’t be an issue gaining new customers. Liliia concludes that utilizing gamification as a tool to deliver financial education to children can benefit both banks and consumers. Since competition is low in the existing market and acceptance is high among customers.