ASIC seeks consultation on school banking review
ASIC is seeking the public’s view of school banking programs as part of its ongoing review of their use and impact in primary schools.
According to the ASIC website, their review seeks to:
– Understand how these programs are implemented and how they are marketed to school communities;
– Understand how students are engaging with these programs and the accounts established through these programs while they are at school and after they leave school;
– Assess the benefits and risks of school banking programs; and
– Develop principles for appropriate conduct and good practice in the implementation of school banking programs.
Banking Consultation & Consumer Research
ASIC met with deposit-taking institutions (ADIs) to investigate various programs, including how they run their programs, participation rates, interest rates, incentives such as toys offered to students, and how they use branding.
It also commissioned qualitative and quantitative consumer research. The research found that overall satisfaction with these programs is high, “however, there was some concern about the lack of digital interaction and substandard interest rates.”
With around 60 percent of primary schools participating, school banking programs have been embraced by Australian families for decades. According to ASIC’s Consultation Paper, while parents rate the programs highly and are “often drivers for student participation in school banking programs”, the research into consumer saving behaviour may not be as supportive.
“The research suggests that students who retain interest in the program are more likely to be internally motivated – they do not rely on their parents to fill out the deposit slip or remind them to take money to school.
“There is limited evidence among past students that school banking programs have a lasting impact on their saving behaviour.”
What’s that? A dollar might not go further?
“Their recall of the program is often limited to the ritual involved. The research findings indicate that school banking increases the chances of a participating student remaining with the ADI that provided the program after they finish school and progress to adulthood. Findings also suggest that non-participating students were also likely to remain with the same ADI they banked with as a child.”
ASIC aims to develop principles for appropriate conduct and good practice in the implementation of school banking programs, to ensure they’re in the interests of young Australians.