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How teens will bank in the future may depend on how they bank now

  • Financial products designed for teens are increasingly hitting the market this year.
  • Teens want financial education as part of their banking services.

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How teens will bank in the future may depend on how they bank now

With malls no longer a spot for regular hangouts, teens are shopping less than usual. In comparison, though, their spending activity online is still high, with 90% reporting shopping online during the Fall, according to Piper Sandler’s biannual “Taking Stock with Teens” report. 

With cash almost out of teens’ everyday vocabulary, there’s now an increased need for tools that help these Gen Zers manage and budget their spending habits in a digital setting. Parents want their teens to be aware not only of how much they’re spending but also how they’re spending. 

Consequently, we’re seeing an increase in teen banking solutions from all over. Banks like JPMorgan Chase and Wells Fargo are offering teen banking solutions. Revolut launched its subaccount Revolut Junior back in March and added a new savings goals feature to it in October. 

There’s also a flood of new banking apps aimed directly at teens, including Step and Copper, which launched their services this year. These new apps could change the way teens bank — both now and in the future. 

Step, a teen banking app which just became available to the public in September, markets itself to 13 to 18 year olds. Its aim is to be its customers’ first banking experience, said co-founder and CEO CJ MacDonald. MacDonald was a guest on our podcast this month where he discussed the trends producing the tailwinds into teen banking. The fintech also puts a lot of weight on financial education. On Step’s site, there’s a ‘Banking 101’ tab that includes blogs about budgeting, saving and how to spend money wisely. 


“Money is one of those things that often gets overlooked, where you’re just kind of expected to figure it out on your own. A lot of people make costly mistakes in their younger years around credit card debt, student loan debt, and credit,” said MacDonald. “And it’s tough to dig out of that hole.”

It’s not just parents who are turning to these apps. Teens themselves are expressing interest. 63% of Gen Zers would show preference to financial institutions that incorporated financial literacy into their services, according to a study by Raddon, a research and analytics company.

Copper, a Seattle-based challenger bank for teens, targets 13 to 19 year olds. The company encourages teenagers to save money by rewarding them with cash whenever they reach a savings goal or pay parents back on time. It also gives them money for passing a finance quiz. For Gen Z, which is proving to be a financially conscientious generation, features like these make a difference in their banking choices, said Eddie Behringer, co-founder and CEO of Copper.

“Gen Z, unlike prior generations, is hyper aware of the financial missteps of past generations,” said Behringer. “Parents and teens alike acknowledge that current banks don’t teach their generation about money, in this critical time before they become adults.”

With new banking apps designed for teens, digital banking could become more ingrained in teenagers’ everyday use. Teen banking products and services could also impact how they see traditional banking altogether. 

“The need is real and the solution from the big banks just isn’t cutting it.” said Copper’s Behringer.

But incumbent banks have also been showing interest in providing more teen-focused checking accounts. These banks offer their own teen banking solutions, as well. Chase offers Chase First Banking, a checking account for kids ages 6 and older that allows parents to track spending. 

Wells Fargo launched its Clear Access Banking product in August. The banking solution is designed to be transparent and easy to understand, an ‘ideal first account’, according to Stacy Kika, senior communications manager at Wells Fargo. The account waived its monthly service fee for primary account holders  aged 13 to 24.

“We understand that building relationships with customers at an early age helps to maintain and strengthen our relationships with our customers as they become older and go through different stages of life,” said Kika. “Providing support and guidance to teens when opening their first account is important, as many start with their first account as a building block to financial success.”

Wells Fargo and JPMorgan Chase were also among the investors behind teen-focused challenger bank Greenlight’s last round of funding. One of the leaders in the teen banking industry, the challenger bank hit almost 1 million users back in March. It raised $54 million dollars in this round of funding. 

Even though it’s not clear how teens will bank in the future, one thing is certain, and that is that a lot more of them are showing interest in financial education. And banks are zooming in on that.

“Teens really want to set a budget, they want to be responsible with their money, but they don’t have the tools to do it, because no one talks about it at home, and no one talks about it in school,” said Ellen Kiehl, head of communications at Step. 

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