Today’s kids have the technical ability and know-how to build virtual worlds in Minecraft and Roblox, deceive friends in Among Us, yet user interfaces for kids to interact and connect with their finances are not easy to find. The majority of guardians rarely involve their kids in financial decisions or discussions. This has led to a generation of young people grasping for financial literacy.
What is the problem
Kids make up more than a quarter of the world’s population, yet a large majority are unbanked or underbanked. Using inclusive technology to create a platform that grows with the kid developmentally, NEST EGG gives kids access to tools and opportunities necessary to succeed in this life, financial literacy. We use Finastra’s API to streamline adoption of NEST EGG for bank+ customers who can then offer it to their clients.
What is NEST EGG
NEST EGG is a fully functional gamified banking application for kids. NEST EGG uses real money in a kid’s custodial bank/investment account. It pairs real financial decisions made by the kid, approved by the parent. It leverages the fact that having “skin in the game” increases engagement. When the kid reaches a legal age, a real Nest Egg is delivered.
After on-boarding the kid to the kid application, parents have access to their kid’s bank and investment account information. When their kid makes a change to their portfolio, the parent’s app will receive a notification to view the transaction request. A parent can then decide to approve, reject, or hold. If they don’t approve, parents and kids are given the opportunity to have an impromptu learning conversation about why. (For the young age group, parents can curate their stock marketplace with stocks and funds that they approve.)
The kid can view their bank portfolio on a simple user interface that incorporates a finance ed-tech component. Application instructions are conveyed by voice to include pre-readers and the script is peppered with finance vocabulary words such as "deposit", "earn", "stock", "stock market" and "dividends", reinforcing the financial education. As kids progress through their finance story-based lessons, levels and app functionalities are unlocked. Eventually, kids can grow new eggs, the second being the ‘invest egg’ which eventually enables a real investment trading platform for the kid. Parents are ping-ed to “approve”, “reject” or “hold” trade transactions, to make it legal. As investment platforms user interfaces continue simplifying, it is quite possible for a kid to follow. NEST EGG's user interface grows and develops based on the kid’s age.
One key benefit is to increase financial literacy. By creating a legal portal for kids to access and make supervised banking/investment decisions, opportunities for financial-related conversations increase among the household and the kid’s community, since people talk about topics they know about or are directly engaged in. A secondary goal is to bank more kids into the system, so that compound interest can help build nest eggs and even the playing field more in terms of inherited wealth.
NEST EGG empowers kids to manage their own finances on levels they are ready for, reduce the burden on parents to teach their kids finances and converts them into kid-driven questions. As kids engage with NEST EGG, their budding interest in their own finances will be sparked, giving families the inspiration to host manageable bite-size conversations about real financial decisions.
With NEST EGG, banks+ can onboard a large segment of this unbanked/underbanked population legally and allow them to offer this product as a means to educate and grow the next generation of wealth. Banks+ also minimize acquisition costs by on-boarding at a young age, potentially grooming long-term brand-loyal relationships. Banks+ can also collect and monetize data on kids’s financial activity and have data on their investing/savings habits. Thus, it becomes easier to offer additional financial services to the parent for the kids and the kids when they come-of-age.
We aim to push NEST EGG on the Fusion Store, so that more banks+ can offer this service to their customers. FAMILY PAY inspired us to create this real use-case on the top of FusionFabric.cloud. Like FAMILY PAY, NEST EGG will increase traffic on FusionFabric.cloud APIs. And as FAMILY PAY eludes, these types of apps will pave the way for a better future for kid involvement in the financial systems. FAMILY PAY is a 2019 Finastra Hackathon winner.