Natalie Monko Lead Project Manager

• Fintech

January 25, 2022 9 min read

Fintech for Family: How to Build Kids’ Debit Card & Financial Learning App

Fintech for families is a prospective market. According to the Office for National Statistics (ONS), there were 19.4 million families in the UK in 2020, with an increase of 1.4% on the previous year and 7.4% over the decade from 2010 to 2020. This means a considerable win for businesses that target this audience.

Moreover, the fintech for kids segment is impacted by the COVID-19 pandemic to no less extent than the others. You may ask: “What children and adults’ financial challenges have in common?”. Actually, a lot. Children witness and soak up like a sponge everything that is going on with their parents: unemployment, self-isolation, remote work, unpredictable changes. Most researchers agree that many money habits are set by the age of seven. 

This means the kids of our times are growing out being aware of how important saving and planning are for their families’ financial stability. Apart from that, during lockdowns, many kinds and teens have had fewer chances to spend their pocket money and squirreled them away. These are the amounts that are waiting to be spent now. 

Taking into account that the weight of delivering financial education for kids rests on the family, we can conclude that parents now do need effective tools and resources to teach their kids to be financially responsible.  And where there is demand, there is supply. A number of financial institutions providing family-friendly products has been growing lately. They offer tools and apps to help families manage their budgets and build child’s core money management skills in a safe and secure environment. According to Crunchbase data, in the past five years, investments into fintech startups offering savings platforms for children, young people, and parents have made up about $535 million for 89 deals, accordingly.

Surf experts have various fintech projects in the portfolio. Among them is Your circle app that we developed with SBI Bank. The app is designed to provide families with an easy way to manage the family budget and improve financial literacy, including children and older adults. Based on our experience, in this article, we offer you a guide on creating a banking app for kids and teens that helps parents instill positive money habits.

Reasons to develop finance app for kids

Why do businesses need apps for kids and teens?

Parents are not the only ones who could benefit from apps for kid banking and kid-friendly cards and bank accounts.Here are some key benefits that businesses can get:

• Banks and fintechs can attract new customers — mainly parents who need tools to manage their family money and control their children’s spending.
• A possibility to educate potential customers from a young age — there are high chances that kids and teens will stay loyal to the company or bank that helped them to learn how to earn, save, and plan their personal budget.

For example, Capital One offers MONEY teen checking accounts that cover a fee-free bank account for kids, tweens, and teens, a debit card, and a mobile app. There is no minimum required to start or maintain an account, young customers can use their debit cards anywhere MasterCard is accepted, and the holder gets access to 40,000 Capital One ATMs across the country. Kids can easily track their account balance and set up specific savings goals, while parents are free to link a non-Capital One account for an automated allowance and can set up parental controls and lock the debit card in case of loss or theft.

What do parents expect from budget apps for kids?

If you consider developing a banking app for children, you should not only be sure that your product will be in demand. Another thing to consider is what your target audience (meaning, parents) expects and how you will meet their needs. Here are some of the most crucial ones:

• Parents want to track how and when their children spend their money — to prevent unnecessary spending or purchasing anything dangerous or harmful. 
• Kids’ financial and personal data should be highly-secured — to avoid any leakage or misuse of the sensitive information. 
• Last but not least — parents want to improve their children’s financial literacy and prepare them to bear responsibility for money-related activities.

Current successfully meets the above expectations: a complete parental control combined with the freedom for kids to spend and save is what the company has achieved with their product. Having started as a teen debit card controlled by parents, Current expanded and now offers standard features like free overdrafts, no minimum balance requirements, faster direct deposits, instant spending notifications, banking insights, free ATMs, check deposits using your phone’s camera, and more. What matters is that Current enables parents to control their child’s spendings thanks  to spending notifications, spending limits, merchant blocking, and more.

What can children get from the banking app?

Apart from parents, it’s obvious that kids and teenagers are the key personas in this story and, as it was mentioned, financial education may have a huge impact upon their lives. Here is what kids can get from using an advanced banking app:

• The first advantage for children is time spent with use. Instead of thinking of where to waste pocket money, wandering around the shops, banking apps can help children learn why and how to save their money, and even how to invest by engaging kids into real budget-related activities.
• Becoming more engaged in how to manage their money, kids start to get interested in finances in general, and acquire new knowledge of money management fundamentals.

With the help of gamification elements used in banking apps, kids can get a benefit-focused way of thinking.

A good example of an educational platform for kids is Greenlight Max introduced by Greenlight. The platform allows kids to research stocks and make real investments, as long as their parents approve. This is not only new knowledge, but hands-on experience for their financial future.

What to take into account when developing apps for kids

How does a debit card app for kids work?

Debit cards for kids function like any other debit card, with the difference that it allows parents or guardians to supervise the process as their children learn to manage money. The debit card can be free or have a monthly or annual fee, and associated fees, such as overdraft, reload, or ATM fees.

As a rule, the best debit cards are paired with mobile apps. The general mechanism is much alike with that of adult banking apps: the best apps offer a simple user experience and control over card funds. Parents and kids have online account access, but kids log into their own sub-accounts. Kids have less features available, while parents can monitor, limit or lock the online activities. 

Below are some particular aspects to take into account : 

• Parental control, which may include various features, for example, setting spending and transaction limits, spending trackers, spending alerts, merchant blocking, locking/unlocking cards remotely, locking spending category, and others.
• Kid-focused features that may include built-in financial education, chore management and payments, budgeting features for kids, saving goals, loan tracking for kids, and others.
• Security of the financial services for kids is as important as general mobile banking app security because they refer to the family budget and data. Therefore, the measures shall be adequate and may include PINs and biometric access as an added layer of protection, and the ability of locking/unlocking cards remotely.

How to make a banking app child-friendly? 

Recently, Surf has developed a concept of a banking app for kids that presents a world, where children learn to be financially responsible and plan their financial future. From our experience we can say that while the needs of kids and grown-ups are somewhat similar, banking apps for adults and children should look and feel different. And it is not just about changing the design and including some funny pics.

A great child-friendly banking app: 

• has to be educational, engaging, and exciting. Kids are curious and hungry for knowledge. That’s why they could use an app that can seamlessly explain them what money is, how to use it wisely, how to save up for a dream, or simply put — how to manage their personal finances;
• has a diversified design, where every theme has its interface elements and dialogues so that the app is never boring as it changes with every new level.

• has gamification elements. Gamification in fintech is successfully used to transform the customer experience and ensure a higher retention rate. And more so, if we speak about fintech for kids. During the game, children can, for example, act as an entrepreneur and learn what way their decisions can affect the financial results. Such games can be designed for different ages: for instance, at the age of 6, kids prefer to own a lemonade kiosk, at the age of 9 — to manage production and at 13 — to create their own corporation.

• should include virtual assistants and chatbots.  Children are fond of stories and their characters. At the age of six, they prefer fairy tales, and at 13 — real-life stories. The mascot character and chatbot that come to help children navigate through the interface and understand financial terms is probably a number one feature for a children’s banking app.

Bottom line

To sum things up, it’s safe to say that fintech for kids is a growing market with promising prospects. The financial services for families including kids, teens, and older adults are in need and beneficial for all parties concerned. 

As for apps for kids, they require no less responsible and thorough approach than the apps for adults in terms of UI/UX, technology stack, security, and compliance. Surf has extensive experience with fintech and banking apps for adults, and we know the difference to take into account for kids apps.