ABN AMRO recalls the importance of financial education for children
ABN AMRO conducted a study on the use of payment solutions by young people, revealing an overexposure to various methods and a lack of financial education that could penalize them. In particular, the use of solutions such as the BNPL puts them at greater risk of over-indebtedness. The study thus aims to warn about these dangers and to raise awareness among adults of the importance of early financial education.
FACTS
The Dutch bank ABN AMRO recently published a study in partnership with an institute specializing in family finance awareness.
Entitled "Payment clothes among schoolkids", this study analyses the use of money and different payment solutions by Dutch teenagers.
From a global perspective, the results show that young people follow their bank account more than they did five years ago. Despite this progress, regular monitoring is still too weak and access to many different payment solutions prevents young people from having a clear and accurate view of the state of their finances.
Indeed, while 66% of adolescents check their bank balance weekly, only 43% of them are able to give the amount of money available.
The study points out that financial education begins with the manipulation of cash, allowing young people to perceive the value in practice.
However, once autonomous, they turn to digital solutions that they have little control over, limiting their control over their spending and financial commitments.
Completed at the end of 2024, the study is based on a sample of more than 1,500 Dutch schoolchildren aged between 12 and 18.
ISSUES
The impact of digital payments: With the rise of digital payments, young people are growing up in a world where more and more payments are virtual. It therefore becomes more complicated for them to have a precise notion of money and to realize the impact of their purchases on a budget. Young people are therefore no longer able to know exactly what they have spent, which increases the risk of over-indebtedness.
Increased risk of over-indebtedness: The report highlights the fact that the lack of monitoring of young people's finances can have consequences when they use other solutions such as the BNPL. In fact, not aware of what the use of split payments implies, young people tend to miss payment maturities and thus increase their risk of over-indebtedness.
The key role of parents in financial education: The aim of this study is also to raise awareness among adults of the need to train their children on basic financial issues such as budget management, good spending habits, etc.
PERSPECTIVE
In the face of digitalisation of payments, banks are becoming aware of the need for financial education for young people.Some develop educational and playful offers to accompany and retain them.
Lloyds Bank, for example, announced in February the launch of a partnership with fintech with the aim of Gamify financial education for young people from 18 to 24, illustrating this trend towards more engaging solutions for younger generations.
New bank Bunq also released this week a study Focusing on financial discussions within families. The study shows that parents are aware of the benefits of their children's financial education and that adults as children want to discuss more financial issues among themselves. Despite this, the neo-bank finds that interactions on this subject are rather rare and that parents do not have the resources to educate their children about money management.
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