Youth banking fintechs are becoming increasingly popular in the financial industry, as traditional banks and other non-fintech companies look to tap into this growing market. Last month, telecommunications giant Verizon announced its own youth banking offer, signaling a shift in the industry towards catering to younger customers.
While some traditional banks have attempted to upgrade their youth offerings, such as Credit Suisse’s “1.5 star” digital money box and RBC’s transactional-only children’s app, mydoh, others have chosen to partner with fintechs that specialize in this area. For example, JP Morgan teamed up with family-focused fintech Greenlight, resulting in a significant increase in their valuation. The trend is not limited to traditional banks, as tech companies like Apple have also entered the space with their Apple Card Family offering. This allows parents to set spending limits for children over the age of 13.
As educational apps become more popular among children, fintechs that focus on this segment have a great opportunity to tap into the $150 billion in spending power held by Generation Z in the US alone. Duolingo is one such company that has already taken the lead in this area by offering an engaging and gamified learning experience. Fintechs should not be feared, but rather seen as an opportunity for traditional banks to improve their offerings and customer experience through partnerships and open banking initiatives. As CEO of JPMorgan Chase, Jamie Dimon, suggests, fintechs can be a collaborative opportunity for banks rather than a competitive threat.
One of the key challenges for youth banking fintechs is to not only provide a user-friendly experience, but also to educate children on financial literacy. This is where Gimi comes in, an app built on open banking technology that offers interactive lessons and hands-on features that are directly connected to the child’s bank account.
Gimi’s unique approach to financial education allows children to learn about money management in a practical and engaging way, empowering them to make informed financial decisions. With Gimi, parents and children can gain real-time insights into their spending habits and set up custom budgets, all while having fun and learning about money. Gimi is a perfect example of how bank fintechs can utilize open banking technology to enhance the customer experience and provide valuable financial education to the youth.