Commonwealth bank initiates ‘Start Smart’ program in schools

The Commonwealth Bank of Australia has set plans to expand its school banking program despite being criticised for the same by politicians and financial advisers following a senate inquiry. On Monday, Commonwealth Bank CEO Ian Narev announced that the bank sought to double its investment in its school-based financial literacy programs.

In an interview with the Fairfax media, Narev has called young children as “customers” and answered those who accused the bank of promoting banking to children through marketing programs strategically. "The number one reason we are doing this is because our success depends on the economy and that in turn depends on successful education," he said.

Earlier this month, a senate inquiry was led into its card lending, which stated that CBA should be prevented from carrying on its business as it targets to attract new credit card customers.

The “Dollarmites” initiative by the Commonwealth Bank advertises banking to children. With the introduction of this initiative in academic institutions, the number of CBA Youth Savings accounts has increased more than 300 percent across 3,600 schools in the last six years (75,000 in 2009 to 273,000 in 2015).

The new move of doubling the investment would involve spending of AU$50 million, which would pull nearly 1 million children under the ambit of the "Start Smart" interactive financial literacy for the next two years. For more than 80 years, CBA through its various, School Banking programs, has been teaching children money and saving skills, but the new “Start Smart” program plans to conduct workshops for all children run by expert facilitators.

Senator Sam Dastyari was worried over CBA’s program as it recruits children as young as five. "This is like Dracula running the blood bank," he said. He also insisted that the program locks AU$120 billion from the school children for the rest of their lives. "You're more likely to leave your partner than your bank," he added. However, Narev has hit back saying that the program was effective for both bank and the children. "We are happy to get early customers early on,” Narev told Fairfax Media.

He also denied that the AU$50 million investment was done in a bid to get to the good books of the public after Fairfax Media exposed the bank's predatory financial planning activities last year.

Financial adviser Scott Pape of Barefoot Investor called the Dollarmites program as a marketing strategy to benefit its business. "It is the equivalent of having Ronald McDonald teaching kids about nutrition," he said while taking a dig at CBA’s new move.

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