Parent-child banking: Reimagining the piggy bank for the digital age
When I was eight years old, I had my heart set on a new bike and was encouraged to save for it. This was my introduction to the world of finance. I learned valuable lessons about patience, budgeting and saving, and my ‘piggy bank’ was an important, tangible tool to help me reach my goal.
This scenario, however, is no longer as typical today.
The digital revolution has had a profound impact on banking and payments. With cashless systems and practices on the rise, we as an industry need to think creatively and carefully about appealing to young people – and, in turn, their parents – so they can independently learn the value of money without being prompted.
The Visa Innovation Center London commissioned research1 and tested prototypes to reveal learnings and establish product principles for what a best-practice digital parent-child banking proposition could look like.
What we learned
Through focus groups and quantitative surveys conducted by our research partners, we engaged with 2,000 adults and children and reached three main conclusions:
1. Parents and children’s needs are not always fully aligned
The findings showed that as children become young adults, they are interested in learning about basic financial ideas and principles (such as income and savings), and having open conversations with their parents. Parents of 12-14-year-olds, however, prioritise maintaining control – from authorising spending on certain items and websites, to knowing their children are prevented from spending money too easily.
At 14-16, they want more independence, but still value being able to discuss future financial needs and goals. Parents, in turn, begin to place more emphasis on teaching, prioritising having conversations and encouraging their children to learn from mistakes.
By the time they reach 16-18, parents’ desire for control drops, focusing more on encouraging regular saving. At this age, young people are keen to be more independent and move on to more sophisticated approaches to saving, such as investing.
2. Balancing control with independence is a must
Parents want to create a ‘walled garden’ where their children can manage their money safely. This level of oversight decreases over time and control is eventually handed over entirely to the child:
- When children are aged 8-11, 80% of parents want to know what they’re spending their money on
- At 11-14, this drops to 66% of parents
- By 15, it is not seen as a priority, with parents typically keen to step back and encourage positive behaviours, rather than monitor spending
Parents’ desire for control declines as their children grow up and want more independence. They are open to receiving money management support, but want to do this on their own and tend not to welcome any ‘help’ that oversteps those boundaries.
3. The desire to save is widespread
Adults often underestimate children’s desire to save from an early age. Eighty-four percent of 11-14-year-olds ‘agreed’ they want to save when there is something specific to save for, while just 77% of parents for that age group thought they would be motivated to save.
The role of cash in helping children save was also interesting. While cash transactions in the UK are in decline, we found parents still give cash to their children because it feels more ‘real’ and encourages saving. This was particularly true of parents of younger children.
We believe these are four design principles that should be central to the development of a parent-child banking proposition. These have been inspired by this research and the feedback on our prototype apps:
Consider creating a digital version of the traditional ‘piggy bank’ saving scenario, requiring children to complete tasks in order to earn an allowance – and learn about the value of money.
A ‘task centre’ could enable an adult to set tasks for their child to complete before money is moved into their account – such as taking out the recycling or achieving an ‘A’ grade on a school test. Uploading a photo of the completed tasks not only prove the tasks were completed, but increase interaction with the app.
Offering advice and education can also be incorporated in a fun, accessible way. An app assistant or ‘mobile bot’ could be a helpful tool that not only guides a child through the banking app, but also provides personal recommendations on how to save more money faster.
Make it social
While children may not be banking or investment experts, they do tend to be digitally savvy. The average age of a child to get a smartphone in the UK is ten2. Therefore, a banking app for children should include social features they are familiar with – such as in-app messaging.
This would allow parents and children to communicate about money through the app. It also enables adults to securely share information about their child’s saving targets with family members and friends, encouraging direct transfers to help them achieve their goals. Notifications could be enabled for parents, showing them a range of insights, from what their child is spending, to where they are physically via GPS.
Rethink language and visualisation
Putting yourself in a young person’s shoes and thinking and speaking like they do, is key to the success of this type of proposition. Commonly used expressions such as ‘withdraw funds’ may not resonate as clearly, whereas ‘take out money’ could.
Consider how images can help children engage with saving and learn the value of money. Those who tested our prototype particularly liked a feature that used the peak of a mountain to symbolise their savings goal, and a climber to demonstrate where they were in relation to achieving their target.
A banking app should evolve to suit changing needs as children mature and develop the way they manage their money. Parents could be prompted to increase their child’s responsibility by the app itself, which would be able to recognise when a child’s spending behaviour is responsible.
It is unlikely that every use case can be thought of – and solved for – in the first iteration of a proposition. This is why a banking app should be built so modular can be added or adjusted without changing the core functionality.
While the piggy bank may be less of a household staple than it once was, there is an opportunity to update it for the digital world. In this way, today’s tech-minded young people can learn valuable financial lessons and be set up for future success, while banks can show they are attuned to the needs and wants of a valuable target audience.
* This information does not constitute financial or other professional advice and is general in nature
1 Research conducted by Ipsos and Jigsaw in the UK, in H2 2018. Quantitative questionnaires were completed by 2,087 young people and parents and 18 focus groups were held.
2 According to research from Internet Matters https://www.internetmatters.org/hub/?tab=research
All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.