Can fintech power high school students' financial learning?
There's no question that the digital era has changed banking and financial transactions drastically. Today, a person can carry out all their banking needs without ever setting foot in a physical bank. Paper checks have become such antiquity that major publications write "how-to" articles on filling them out. Transferring money to another person or a business is as easy as a few clicks on a smartphone. And yet, as the options expand, so too, it seems, does the knowledge gap. In this new fintech world, where managing personal finances is rarely taught in school, how do young people learn about modern financial matters?
That's where a new digital financial literacy course aimed at high school students comes in. In November, the digital payment network Zelle®, in partnership with social impact education technology company EVERFI, launched the free digital education course, Money Moves: Modern Banking & Identity Protection,™ which is available to high schools across the United States. In recognizing the financial literacy problem, the financial services industry hopes to be a part of the solution.
Rose Corvo, chief marketing officer at Zelle, says the goal in offering the course is to make a long-term impact on students' lives.
"The course is interactive and was designed for students to learn about and practice problem-solving skills for common everyday financial situations like how to safely use mobile banking, peer-to-peer payments, and ways to identify and avoid scams."
Money Moves: Modern Banking & Identity Protection™ officially launched in late October and, as of the end of November, 445 schools have signed up to offer the course and 119 schools had students complete the program.
Getting a head start
Learning about finances at a young age can impact a student's education and even a career path. Just having a college savings account can alter a child's direction, even if the funds in it are minimal. A study by the Washington University in St. Louis's Center for Social Development found that children from low- and moderate-income families who have a college savings account are three times more likely to attend college and more than four times as likely to graduate, even when that account holds just $500 or less. And yet, according to the National Center for Education Statistics, one in five American 15-year-olds doesn't understand basic financial concepts.
Ray Martinez, co-founder and president of EVERFI believes that providing a digital education in a scalable manner could be critical to filling that knowledge gap, as mobile banking continues to grow among under-banked households as well as fully banked households. "As our youth are coming of age in an increasingly cashless society, it is important that we teach them how to manage their finances in a digital world effectively," says Martinez. "Research has shown that providing basic financial education to children not only gives them essential financial knowledge and acquire planning capabilities but also helps them to develop some good financial habits at a young age."
He adds that people don't know what they don't know when it comes to financial literacy. If lessons about banking, budgeting, saving, and spending aren't happening at home—and according to a recent poll, one in four people say their parents didn't teach them about finances—they must start somewhere. According to research by EVERFI, a digital course can offer an opportunity to learn the basics of what can be a sensitive topic in the privacy of their own home using the technology they love.
A digital course of action
The goal is to offer Money Moves: Modern Banking & Identity Protection™ to more than 650 schools across the United States through 2021, covering four distinct areas of personal finance. The first lesson, Foundational Financial Concepts, teaches about the benefits of financial institutions and how they can meet students' needs. Modern Digital Banking explores different in-person and digital banking features, including how to use online banking tools to manage money. Identity Theft and Fraud Protection explores how to control personal information online, how to identify potential financial scams or fraud, and advises students on where to seek help if they're a victim. And Peer-to-Peer Transactions delves into the potential risks and benefits of peer-to-peer (P2P) apps and how to use them safely.
The financial literacy course is an outgrowth of an earlier collaboration between Zelle and EVERFI that began in 2019 and, over a three-year period, the two organizations will offer free online courses to more than 1,000 high schools and 50,000 students, focusing on introductory financial concepts and the modern skills necessary to make informed financial decisions.
"Proactive education at scale is a critical way we can empower this generation to safely participate in modern banking solutions," Corvo says.