The response of banking innovators is not to continue this endless competition, but to shift attention to other client segments. Capturing clients at a young age and actively working to increase their loyalty today appears to be a significantly more useful (and cheaper!) path to a profitable client than just very laboriously acquiring clients from other banks.
"Children's banking" teaches clients from an early age that banking services are a part of their lives, prepares them for using a wide range of products in the future, and at the same time increases the much-discussed financial literacy. Providing children's accounts, children's savings, or prepaid cards linked to parental accounts is a way to make the use of banking services part of family activities.
The youngest generation naturally prefers a "mobile-first" approach, which also increases the digital literacy of their own parents and their gradual transition to increasingly using internet- or mobile banking services.
With a payment card and account, the child gains a sense of responsibility and a tool to track their money movements.
In the parental app, it is possible to define tasks or school assignments that, when successfully completed, are rewarded with a financial incentive from the parent.
Dedicated applications and Internet banking provide the option to set up regular allowance payments into the child's account.
Children need to learn about the value of money and how to handle it. Attractive interactive applications teach children in a playful way how to save or keep track of their small expenses.
Minimizing the risk of cash loss and setting limits on card payments, mobile payments, and cash withdrawals.
The parent has the ability to monitor what their child is spending money on and how well they are saving. In the next stage, for example, they can set limits on categories of children's expenses.
It's interesting that in this area, the demand from young clients and their parents is not fully reflected in the offer of banking products. In the Czech and Slovak Republics, there is only a very limited range of specialized children's banking products available so far.
Providing regular accounts for junior clients may have been sufficient ten years ago, but innovative savings products, adaptation of internet banking, or a dedicated mobile banking application for young clients are still missing from the banks' offerings.
Greyson Consulting has been bringing banking innovations to help our clients grow successfully for 15 years.
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