The Australian Securities and Investments Commission (ASIC) has announced that it will commence a review of school banking programs in primary schools.
The move followed recent revelations that the Commonwealth Bank, which dominates the market for school banking, last year paid a total of almost $400,000 to state schools across Queensland in a bid to encourage more students to join its Dollarmites program.
“Across the country young people are learning about money at school. Financial literacy education is embedded in the Australian curriculum and teachers draw on a range of materials and programs to support an understanding of money and financial concepts,” ASIC said.
“Students are learning about the value of money, the cost of living, compound interest, identifying a scam, choosing a mobile data plan and starting a business.
“It is essential that young people develop the knowledge and the skills they need to engage effectively with financial products and services.”
ASIC said that attitudes and behaviours around money can be shaped from an early age and education is a key component to support stronger financial capability and to better prepare young people to manage financial decisions throughout their life.
To better understand how school banking programs are operating, ASIC said it will seek to understand how these school banking programs are implemented and how they are marketed to school communities.
The regulator said it will also consider how students are engaging with these programs and how the accounts established through these programs while they are at school and after they leave school.
In addition, it will assess the benefits as well as the risks of school banking programs and will set out principles for appropriate conduct and good practice in this area.
“Transparency around school banking programs is important. ASIC wants to understand the motivations and behaviours around school banking programs to ensure they ultimately serve the interests of young Australians, and to enable school communities to have an understanding of the potential impact of these programs,” ASIC deputy chair, Peter Kell said.
ASIC expects the review to be complete by mid-2019.