ASB targets financial literacy

• 75 per cent of eight to 12-year-olds in the ASB SmartStart Survey either don’t have a bank account or rarely use it.

• 13 per cent couldn’t name one financial institution, with over half only able to name just one.

• Many kids think money comes ‘from a hole in the wall’.

A generation comfortable with high levels of debt, a global economic downturn, and low levels of financial literacy have driven ASB to reinvigorate school banking in NZ – an institution it pioneered in 1926.

ASB’s original school banking programme spawned generations of thrifty savers, conscious of putting their pounds, shillings and pence into the bank.

Now 83 years on, the first ASB SmartStart Survey shows that 75 per cent of young school pupils surveyed either don’t have a bank account or rarely use one if they do.

The survey, carried out in conjunction with Young Enterprise Trust, asked over 450 eight to 12-year-olds from 20 NZ schools about their understanding of saving money.

The results were alarming, with 13 per cent of these children unable to name one bank or financial institution, and over half thinking their financial independence would come from ‘luck, and a bit of planning’.

Wellington’s Hampton Hill Primary principal, Alison Cowan had heard a similarly disturbing fact from a Retirement Commission report last year, which showed that when asked where money came from, the majority of children thought it came from a ‘hole in the wall’.

“I vividly remember doing school banking myself as a child, and the learnings from that consistent discipline around saving money stood me in good financial stead for life. On hearing that so many children had no idea where money came from, I contacted our ASB branch manager to see what they were doing about school banking,” says Ms Cowan.

At that time ASB was about to embark on a school banking pilot and Hampton Hill Primary joined seven other schools in a trial banking programme.

Ms Cowan says that by the end of the two term pilot, 60 per cent of her pupils had a bank account and were depositing, on average, $5 a week.

“These children were committed to setting their own saving goals, and they kept it up which is the most important thing.

“Now it’s a new school year and school banking has become a natural part of their week.

“It’s also a great topic of discussion between children, teachers and parents, who recall ASB school banking themselves as children and are delighted ASB has brought it back.”

Other schools involved in the pilot have witnessed similar student engagement with school banking – 300 schools have already registered their interest in ASB’s revitalised school banking programme with up to 75 per cent of students opening bank accounts during its first weeks of operation.

Says ASB’s GM Branch and 3rd Party Banking, Shaun Drylie: “ASB is already the bank for three out of every four schools in Northland and Auckland and one in every three schools nationally.

“However, our original school banking programme had simply grown too resource intensive for both schools and us, so it was discontinued in the 1990s. But with the increasing evidence of declining financial literacy, ASB wanted to reinvigorate its offering to school children.

“We have been supporting Young Enterprise Trust’s financial literacy programme for several years, so starting up the ASB SmartStart survey was a natural next step.

“ASB has also been delivering a financial literacy programme to year 12 and 13 students in secondary schools for four years.

“Our aim with school banking is now to generate awareness and discussion amongst primary school students towards savings so the next generations can reconnect with good saving practices.”

Young Enterprise Trust CEO, Donna Dentice, says the habit of saving is fast becoming a lost art in NZ.

“School banking is important because it starts the habit of saving while young. As NZers currently spend $1.14 for every dollar they earn, we want to reverse this trend for the next generation of earners. We see the ASB School Banking programme as significant to help engage students in a fun way to gain a greater understanding of financial literacy.”

Pioneers of school banking in NZ

• ASB first began school banking in NZ 83 years ago in 1926.

• The average deposit around that time was 20 shillings, but records show as little as one penny was banked at the time. The average deposit today since ASB resumed school banking this month is over $9.

• Children brought their banking to school on a set day each week. Teachers then completed banking registers, and ASB staff collected the bank deposits and registers.

• The process became fairly time-consuming for teachers, so ASB introduced Bank Thrift collectors. Their job was to collect the children’s bank deposits and their ‘passbooks’ which they then processed, returning the updated passbooks the next day.

• Soon ASB banked every school in the Auckland region, bar two. By 1964, ASB had expanded to Northland and within 12 months had every school participating in its school banking programme.

• In 1967 NZ currency changed to the decimal system. At the time the average school banking deposit in the new currency was $1.

• In 1973 ASB heightened its colourful presence in schools with the introduction of ASB icon, Kashin the elephant, as money boxes and on deposit books. ASB sponsored Kashin to Auckland Zoo from Thailand and the 40- year-old elephant remains a firm fixture in the memories of the thousands of young Kiwis who grew up banking with ASB.

• In the late nineties, ASB discontinued its school banking service due to the programme becoming increasingly resource and time intensive for both schools and bank staff. ASB retained a strong relationship with schools, and now banks three out of every four schools in Auckland/Northland, and one in every three schools nationally.

• A decade on, with declining rates of financial literacy and increasing concern from schools, ASB revisited a return to school banking to help a new generation.

• In 2006 ASB began working with Young Enterprise Trust to run a highly successful financial literacy programme in Secondary Schools called ‘What Next’. It continues today to help school leavers prepare for financial responsibilities beyond school.

• In 2008, ASB ran a school banking pilot in eight primary schools across regions in Auckland and Wellington. Close collaboration between the teachers and local branch managers in all schools piloted has helped shape the 2009 programme.

• ASB’s new school banking programme has already had 300 schools express interest in taking it up, with 240 already underway this month. The programme is initially in primary schools and one intermediate school with plans to expand its presence in intermediate schools and secondary schools as it progresses.