financial inclusion
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How Fintech Is Driving Financial Access for the Next Generation

As crucial as it is to meet the needs of today’s customers, fintechs are also beginning to analyse how they can best serve the next generation of fintech users.

In light of August’s child support awareness month, which has fallen in tandem with The Fintech Times‘ own coverage of fintech for good this month, here we’ll discuss how fintechs are championing solutions that adhere to the interests and needs of a younger audience.

Edfundo now live in the Middle East

With support from the likes of Visa and Nymcard, live transactions are now being made in the UAE through the Edfundo Visa prepaid card; an initiative aimed at promoting financial education among children and young users.

“UAE-based parents are now able to provide their children with access to personal finance enabling them to learn, earn, save, and spend from an early age,” explains Andrew Toward, Edfundo’s co-founder and COO.

Following a successful beta launch, the Edfundo wait list community will be onboarded over the next few weeks ahead of an imminent full market rollout.

Simon Wing, co-founder and CEO Edfundo
Simon Wing, co-founder and CEO, Edfundo

“The first child recently made a live purchase during his summer vacation successfully marking more than 18 months’ work with partners like Visa and Nymcard guiding the way,” adds Simon Wing, the company’s Emirates-based co-founder and CEO.

The selection of NymCard as an “obvious choice for Edfundo” as, according to Wing, it is the only MENA-based banking as-a-service (BaaS) enabler with a strategic collaboration with Visa’s fintech enablement programme.

“By integrating Edfundo with Nymcard’s nCore platform we are bringing the future of banking to youngsters in the UAE, and then across the MENA region,” explains Wing.

Toward and Wing are teachers-turned-entrepreneurs with a commitment to ‘financial education first’ and moving the bar from financial illiteracy to financial literacy.

“In a nutshell, Edfundo’s vision is to help families move the bar from ‘financial illiteracy to financial literacy’.
However, the reality seems to be a huge disconnect between a child’s understanding of money and the relationship with money,” says Wing when detailing how financial access will generate financial education.

“As teachers, we know that children learn by doing, thus giving young people early access to personal finance ensures real-life visibility on earning, spending, and saving,” continues Wing, “we call this the ‘journey of money’.

“And this is where the Edfundo smart money management app and the child’s personalised Visa prepaid card come into play, encouraging the child to manage their personal finances in real-time, in the real world, with strict parental controls of course.”

Edfundo for Schools, Edfundo’s bespoke education programme, has already been distributed to several schools in Dubai with more activities with Visa set to roll out in schools during the next academic year.

When forecasting the service’s progression over the course of the next year, Toward comments: “Edfundo sits at the intersection of edtech and fintech on purpose – to make a positive social impact to the financial education of children and families, especially as we move into the reality of a cashless society. Indeed, Edfundo’s commitment is recognised by the Abu Dhabi-based Ma’an Social Incubator.

“Over the next twelve months, we will continue enhancing the edtech side of our business as we build an educator-led, world-leading digital platform to support the teaching of financial literacy.

“We will listen to our customers and the market, constantly adding new features to the Edfundo App (for example, peer-to-peer transfers, gifting from family members, rewards), as we take steps to expand the Edfundo experience to other countries in the MENA region.”

Revolut refreshes its financial app for young people with the launch of Revolut <18

Revolut has rebranded its service for six to 17-year-olds with its launch of ‘Revolut <18’, a new account offering that aims to help young people feel positive and empowered about money, giving them a financial head-start in life.

Previously named ‘Revolut Junior’, the rebranded Revolut <18 will now offer its young customers personalised spending cards and will be connected to their parent/guardian’s Revolut account.

Using end-to-end security and in-app card controls, young Revolut customers can track their activity in-app and get spending alerts to stick to budget and build healthy money habits, as well as setting savings goals.

Additionally, an instant notification is sent to the parent or guardian’s phone when the <18 card is used.

Parents and guardians can set a regular ‘pay day’ for pocket money, but can also set challenges for their young person to complete in order to receive their earnings.

For those Friday evenings at the youth club, a new feature will let young customers tell their friends to “Revolut me!” to send and receive money for free to other users on Revolut <18.

“We’re delighted to introduce Revolut <18 to new and existing customers. The new Revolut <18 yellow design is energised, positive and fresh, appealing to a variety of under-18s,” Tara Massoudi, Revolut’s general manager of premium products, said.

“We listened to feedback from our customers who said they wanted our under 18s product to be customisable and to look and feel more personal to them. Therefore we wanted to create a more grown-up feel to the card and app as Revolut <18 is an account that can grow with you.”

Unusually, the service does not solely depend on a mobile app in order to work as it can be created through the parent’s app instead. Parents and guardians can create a maximum of five <18 accounts, depending on their Revolut plan.

Additionally, teens can sign up for themselves to create a parent account, with parent approval. If the teen is under the age of data consent (below 13 in the UK) then a parent will need to create an account for them from their own Revolut app

International Youth Day 2022: The role of the youth in driving financial inclusion in Africa

With 70 per cent of sub-Saharan Africa’s population under the age of 30, Africa has the youngest population in the world. With such a burgeoning young workforce, the continent’s economy has a chance to grow exponentially, but only if the next generations are given the tools they need.

It is crucial that young people participate in decision-making processes and be provided with numerous possibilities for employment and innovation.

Depending on their needs and stage of life, access to financial services can empower young people and improve their well-being in the right circumstances. According to Cellulant research, children start developing good financial habits as early as age seven.

Cellulant views fintech collaborations as a vehicle for advancing financial inclusion, business expansion and the overall economic development of Africa. The Pan African payments company is currently establishing options for people to become financially autonomous and empowered by giving global, regional, and local enterprises the rails they need to own their financial journeys.

The company recognises collaborations with fintech firms, especially those founded and led by the youth, as a tool to promote financial inclusion and the growth of individual businesses as well as the continent of Africa’s economy as a whole. As evidenced by some of its recent partnerships, young African founders are making significant steps in a variety of sectors to drive financial inclusion across the continent.

A study done by the OECD for the G20 Global Partnership for Financial Inclusion shows that young people are more likely to choose non-traditional financial service providers since they frequently have weak links with the official banking sector, both in sub-Saharan Africa and globally.

It should come as no surprise that this generation is driving fintech adoption globally given that they have never known a world without mobile, web, and app-based services.

The study further revealed that; one in three internet users worldwide is under the age of 18, and globally, 71 per cent of young people and only 48 per cent of the general population use the internet.

Many national governments, including those of Costa Rica, Estonia, Finland, France, Greece and Spain, have explicitly recognised internet access as a human right since access to online information and services has become so crucial.

Youth financial risk mitigation and the lessons to be learned from financial access

GoHenry is a US and UK-based fintech that provides Visa debit cards and a financial education app for children aged six to 18. During the course of August, child support awareness month, the company will naturally be very engaged with various youth financial inclusion programmes and initiatives.

Speaking exclusively to The Fintech Times during this very important month, and throughout what is now international economic turmoil, the company’s co-founder and COO, Louise Hill, discusses the real lessons that parents should be teaching their children about money.

Louise Hill, co-founder and COO, GoHenry
Louise Hill, co-founder and COO, GoHenry

“The rising cost of living is front of mind for many families at the moment and will be for months to come,” explains Hill. “Although it can feel like a hard topic to broach at the best of times, now is a good opportunity to teach kids about the importance of saving money and spending responsibly.”

Hill emphasises how conversations about finance should be “a normal part of family life,” providing an opportunity to explain why certain essentials are no longer available in light of rising inflation.

“That might be a conversation about moving to free tv channels rather than paid-for subscriptions, or it could be about swapping big brands for supermarket equivalents,” comments Hill.

“The key thing is ensuring you explain the ‘why’ behind these decisions, especially for younger children, and the easiest way to do that is by spelling out the difference between things we need and things we want.”

Financial management is risky enough for adult users, so when quizzed on how accessing financial services could be made safer for youth adopters, Hill explained how the principle remained as the backbone of GoHenry’s services.

“This is something we thought about in great detail before launching GoHenry,” Hill comments. “One of the main concerns was around kids overspending and running up debts, or buying unsuitable products online without their parent’s knowledge.

“That’s why we spent a lot of time honing our robust parental controls which allow kids to earn, save and spend their own money, all in a safe environment with adult supervision. Our cards are prepaid which means kids can only spend the money that’s on the card, so there’s no danger of debt or overdrawn accounts. When kids do spend money using their card, parents receive real-time notifications, allowing them to monitor their activity and respond quickly if needed.”

When asked how financial risks could be better mitigated, Hill said: “GoHenry cards do not work in shops that have an ‘over 18’ merchant code. These are usually places that predominantly sell alcohol or cigarettes, such as off-licences.

“Parents can also set custom limits for extra peace of mind, including which channels the card can be used (ATM, in-store or online), how much they can spend each week, how much they can spend in one go and the cash machine transaction limit.”

Author

  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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