How Kiwis are tackling financial literacy in schools

  • By Christine St Anne

A partnership between a financial education company and Kiwibank is successfully educating the next generation of New Zealanders, highlighting that there is scope for financial literacy to play a role in bank products. 

Recently the Victorian government decided to abolish the Commonwealth Bank’s Dollarmites financial literacy program in schools in place of a curriculum-linked financial literacy program. 

According to the Victorian government, “students often missed out on compounding interest due to "unfairly low" interest rates offered through the school banking programs”. 

In fact, following the announcement, data from RateCity revealed that CBA’s Dollarmites program did not offer competitive rates compared to other youth bank products in the market. 

According to RateCity, CUA’s Youth eSaver earned the most interest over the seven years from Kindy to Year 6.

CBA’s Youthsaver ranked 22nd in terms of rate and 21st in terms of interest earned. 

“News the Victorian government is stepping away from the Commonwealth Bank’s Dollarmites Program and stepping up its own financial literacy programs should be replicated across the country,” RateCity research director Sally Tindall said. 

“If McDonald’s came into schools to teach kids about healthy eating there would be an outcry. 

“Why do we let the Commonwealth Bank take the reins when it comes to learning about money?” she said.

However, analysis from RFi Group reveals that there is potential for youth banking products to play a role in teaching young people better ways to manage their money. 

“Teaching children how to budget, without relying on cash, is something that financial institutions should be focused on to help support financial literacy and independence among current and future customers,” RFi Group deputy general manager Kate Wilson said. 

“Youth banking products play an important role in this, and a role that our research suggests is recognised and valued by parents, and good youth,” Wilson said. 

Bank products aside, Kiwibank is driving a successful financial literacy program with financial education company Banquer. 

The partnership was profiled in the June edition of AB+F Magazine after both Kiwibank and Banquer won the Best Financial Literacy and Betterment Initiative at the inaugural RFI Group New Zealand Banking and Innovation Awards. 

A financially capable generation 

The partnership began in 2015. 

Five years later, this relationship has improved the financial literacy and developed the financial capability of more than 150,000 Kiwi kids, with ambitions to support a further 110,000 Kiwis in 2020

This uplift in financial education has been achieved through three innovative platforms; Banqer Primary, Pēke Kā, and most recently, the launch of Banqer High. 

Kiwibank Sustainability Lead Julia Jackson said the bank provides its expertise to ensure educational content is accurate, the creation of engaging video content (that has 250,000+ views), device donations are made, and have conducted school visits to talk to students about banking. 

The flagship platform, Banqer Primary engages students with finance through online accounts, and mock classroom currency, students begin to earn money, transfer it, save it, and pay classroom bills (such as weekly desk rental, or wifi costs).  

Building on these foundations, students aged 9 -13 then traverse concepts such as credit cards, renting, mortgages, contents insurance and more within Banqer High - all through simulation.  

With financial behaviours forming as early as seven years old, Banqer Primary is a crucial proponent of national financial attitudinal shift and behavioural change, evidence to date suggests that some parents have commented that their children are more mindful of family costs like asking do you pay rent for our house etc.

Both Banqer and Kiwibank have regular check-ins to ensure the program remains robust and timely although Banqer co-founder and CEO Kendall Flutey and her team are responsible for the day-to-day running. 

“They may not be at the front every day with us, but the team at Kiwibank provide us with the support when needed. It really is quite a close, dynamic relationship,” Flutey said. 
 
“What has actually blown me away from my previous experience working with bigger organisations is the pace and willingness that Kiwibank has provided to the program. It has been really incredible, and I think fundamental to our partnership,” she added.  

Kiwibank is state-owned, but still must adhere to commercial objectives and with that a balance has been struck between advocating and supporting a national literacy program without promoting the bank. 

“We have been incredibly conscience of how we have developed the partnerships. We have very clear lines around how Kiwibank will be seen in the platform,” Jackson said. 

“For example in the primary school space, a child will never see the Kiwibank logo when they are interacting with the financial literacy concept. “That's incredibly important to us because we didn't get into the partnership for that reason. 

We're a commercial organisation, of course, but it’s not the primary reason. We would definitely not want to be seen to be influencing choices made through the platform,” she added. “We genuinely want to support the creation of a more financially capable generation of Kiwis.”