Banks, do not educate our children about money

The financial system in Israel has discovered a new target audience: our children. It is hard to miss the campaigns that have recently appeared on television, on billboards, and in other advertising media. Banks, credit card companies, and payment apps are launching digital wallets, prepaid cards, savings plans, and content that seeks to teach children how to manage money. One bank has launched a platform for children from the age of eight, a popular app owned by banks already offers a digital wallet for young people, and credit companies offer dedicated cards that allow parents to load pocket money and track expenses.

On the face of it, this is a positive development. Children need to learn about money from a young age. The question is who teaches them, and above all, what financial concept is behind the lesson. For decades, the traditional financial system in Israel did not lead a financial literacy revolution. On the contrary, it profited from a public that takes loans, uses credit, leaves money in checking accounts, and deposits savings in banking products, sometimes at an interest rate that did not reflect the alternatives available to it.

How many customers over the years have received a phone call from the bank explaining that it is worth learning about the capital market, understanding what a long-term investment is, or how inflation erodes money that does not yield sufficient returns? And how many times, on the other hand, have they received offers for loans, credit lines, or deposits?

The problem is not that a deposit is a bad product or that a loan is always a mistake. They have a place in proper financial planning. The problem is the worldview in which the bank is both the one selling the product and the one supposed to teach us how to choose it. Now that same system seeks to enter our financial lives even earlier — as early as age eight. And this is happening just as the public is beginning to change.

In recent years, a financial revolution from below has been developing in Israel. Young people learn about investments through social networks, podcasts, communities, and independent content. More people are asking what to do with their money, how much management fees they are paying, what their pension is invested in, what the difference is between a deposit and an investment, and what the meaning of compound interest is over the years. Not all content on the web is high-quality, and not every financial influencer is a source of knowledge. Precisely for this reason, real, broad, and independent financial education is needed, one that teaches children to think and not to choose a product.

A child needs to understand budget, savings, investment, risk, return, inflation, and compound interest. He needs to know that the bank is a service provider, not a supreme financial authority, and to understand that when a financial entity offers him a product, that entity also has an economic interest. Banks are allowed to develop products for children and even compete for them. But we must not give them ownership of the next generation's financial education.

The revolution has already begun. The public is becoming more aware, more critical, and more financially educated. Now we need to ensure that our children also move another step forward, and do not return to the concept that learning about money means learning which product the bank wants us to buy.

Adva Hankin is an insurance agent and financial planner.