Financial institutions acknowledge that their customer base is forever expanding and evolving. One such customer base or segment is the unbanked teen population, popularly known as the ‘pre-banked.’ Banks in mature markets, such as the US, Canada, Europe, China, and Oceania, market their teen banking products to parents with the objective of imparting financial literacy to teens. They focus on teens to convert them into lifelong customers. Whereas, banks in developing markets focus exclusively on teens to promote teen banking.
Teen banking, with an underlying objective of instilling money management habits in teens, is built on the founding pillars of budgeting, spending, and saving. The US saw a surge in teen banking app users during the COVID pandemic.
Teen Banking Apps Are Gaining Popularity
New FinTech entrants have been bolstering teen banking in the US market since 2019. Tools that help parents and children learn about money management play a significant role in banking the ‘pre-banked.’
Roughly 25% of the US population is below the age of 19. Typically, Gen Z is not the target customer segment for incumbents as it does not contribute to revenue generation. However, new FinTechs and challenger banks in the