Digital literacy: the role of the FS industry
Digital skills are more important than ever.
In fact, according to a recent report from Tech City, by 2020, the majority of jobs will require digital expertise.
As a result, companies, parents and teachers alike are currently focussed on ensuring children are equipped with the skills they need to succeed in an increasingly digital world. For example, since last September, pupils have been learning computer science, information technology and coding as part of the primary school curriculum.
Digital is indeed becoming a fundamental literacy in which we all have a responsibility to educate our children. As technology advances, various aspects of our lives, from the way we communicate, to the way we shop, are being continually transformed by digital.
However, nowhere has this shift been more prominent than in money management. Recent developments in online, mobile and even smartwatch banking are making it easier than ever for banking customers to stay on top of their finances.
It is therefore surprising that the financial services industry still doesn’t cater for children, and isn’t yet playing a role in helping them develop digital financial know-how. Currently, just two UK high street banks provide current accounts for children under the age of 11. HSBC and NatWest’s youth accounts cater for children aged seven upwards but there are no providers for the under sevens.
This is completely at odds with parents’ clear desire to immerse children in personal financial management from a young age. According to our recent research, 80 per cent of parents have introduced their children to digital money from a young age as they believe it will help them develop valuable money management skills.
Plus, an increasing number of parents are paying their children’s pocket money digitally. A third of parents now pay their children’s pocket money into a digital bank account rather than in cash. While over a quarter (28 per cent,) pay their children in digital currencies for use in gaming communities such as Minecraft and Moshi Monsters or online services like iTunes.
Learning the power of spending and the value of saving from a young age provides children with valuable life skills and digital financial management tools can help children understand and appreciate the value of money. Our research findings clearly highlight that there is an opportunity for banks to appeal to younger generations and parents by lowering the minimum ages on digital bank accounts and by providing bespoke online services to help teach children how to manage their money.
In a society where digital skills are becoming implicit, teaching children about money management through digital banking is not an option, but a necessity. But it is not just parents, but banks too who have the responsibility of providing children with the opportunity to develop the necessary skills by providing tailored tools to enable them to do so.