How parents can foster financial literacy in teenagers

Youth-focused digital banking platforms can use gamification techniques to teach money management skills

With the right controls and protections, parents can take charge and steer their young ones towards safe financial learning, with the help of digital banking apps. Getty

All parents want their children to appreciate the value of money, understand the benefits of hard work and learn how to save. Yet, in an age of instant gratification, these can be hard lessons to learn.

However, a new generation of creative, specially designed, youth-focused digital banking platforms could hold the key.

The great news is that as digital natives, Generation Z is already primed for digital banking. Equipped with smartphones and more than used to doing things online, it should be easy for parents to introduce them to the world of finance.

Yet, many parents will have questions about how sensible is it to offer a bank account to a teenager — what if they are exposed to the murky world of cyber crime? What if they use their account to gain access to dangerous content? And what if they make an accidental (and costly) transaction?

The beauty of digital banking applications for teenagers is that they are often specifically designed to prepare them for these kinds of challenges — they are created with education, security and controls in mind.

With the right controls and protections, parents can take charge and steer their young ones towards safe financial learning. And parents also have schools and the government pitching in to help.

Many parents in the UAE are already seeing teenagers benefit from state-backed initiatives such as the UAE Authority of Social Contribution’s Ghaya Financial Literacy programme.

The programme helps them to understand financial products, learn how to manage money, grasp the concept of debt and know how to handle financial difficulties. It also shows teenagers that if they can build smart money skills, they can make an important social and economic contribution to society — because a financially literate society is more likely to prosper.

This is an important learning moment for young people that global bodies such as the Organisation for Economic Co-operation and Development (OECD) have discussed.

The OECD has carried out research that shows financially educated consumers make better decisions for their families, increasing their economic security and well-being. It also suggests that financially secure families are better able to contribute to vital, thriving communities by making responsible financial decisions throughout their lives.

Schools and non-profits are also working to build essential financial planning skills among teenagers — even though they are not legally required to.

The UAE’s saving scheme provider National Bonds announced a partnership with one of the country’s education providers this year to deliver seminars and information kits to children of all ages.

The non-profit youth training and education organisation, Injaz Al-Arab, has actively participated in projects to improve the financial resilience of low-income workers in the UAE by teaching them how to open bank accounts, budget and manage their savings.

Yet, the private sector has a unique ability to use its expertise to work with parents to advance financial literacy in the home and prepare the next generation.

Digital banking apps must have personal responsibility and parental oversight baked in to their features.

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These accounts must offer logins for both parents and youth, putting the parent in the driving seat. This makes it easier for mum and dad to control what is happening. It also gives them the power to incentivise good decision-making and responsible behaviour.

These apps should make learning about financial planning fun by using “gamification” techniques that allow parents to set challenges inside the platform, with chances to earn extra allowances when they are completed.

By using a gaming approach and sharing control between the parent and young person, the entire process of financial responsibility becomes a family affair.

The gamification aspect also hammers home the message that money should be earned — not simply gifted. This is an important factor in building a healthy attitude towards appreciating the true value of money.

By introducing teenagers to these platforms, parents and banks can work together to create the foundations for a strong, responsible financial future.

Digital banking apps must have personal responsibility and parental oversight baked in to their features

Samir Talkhani,
senior vice president and head of digital consumer acquisition at Mashreq Neo

Banks have the capacity to nurture financial skills further by using their digital capabilities to build personalised tools that teach young adults how to start preparing for big life events, such as marriage or setting up a business.

This is where banks can step up by making a lasting difference to the individual’s future, their families and communities.

Mashreq is now working with the Abu Dhabi Global Market Academy to co-operate in the creation of a banking educational centre at the Abu Dhabi Global Market.

This holistic approach is typical of the vast opportunities inherent within the digital revolution to engage with millennials and Generation Z: through choice, efficiency, speed and innovation. And we can be sure that if children love it, so will parents.

Samir Talkhani is senior vice president and head of digital consumer acquisition at Mashreq Neo.