Page 399 - Week 02 - Wednesday, 10 February 2021
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school communities may believe that these programs are purely or largely an altruistic community service offered by the provider rather than a commercial activity.
Secondly, ASIC found that there is no evidence that school banking programs improve the financial literacy or saving habits of our children.
Thirdly, ASIC found that banks and financial institutions use sophisticated marketing techniques through their school banking programs to target vulnerable young children who are vulnerable consumers. To quote ASIC once more:
Providers make use of persuasive advertising strategies to deeply engage participants with their brand. Little consideration is given to the participants’ abilities to filter marketing messages.
Fourthly, ASIC found that banks and financial institutions make payments to schools to encourage them to get students to participate in school banking programs and in return use school resources and much-needed school volunteers to market their products to students.
During ASIC’s review, the Commonwealth Bank held a 93 per cent share of school banking programs, with over 175,000 students enrolled in their programs across the country. As a result of ASIC’s investigation, Bendigo Bank, IMB and South West Credit all decided to voluntarily end their smaller, yet still problematic, school banking programs midway through last year. But by far the biggest bank in the game, the Commonwealth Bank, has retained its overwhelming presence in Australian schools and has continued to invest in retaining its grip on the significant market share of students.
Other states have already taken action on this issue. Just before ASIC’s report was released to the public in November last year, the Victorian Labor government moved to remove school banking from their schools almost immediately, from term 1 of this year. To quote the Victorian Minister for Education, James Merlino, “Students deserve high-quality financial literacy, free from commercial interests.” I could not agree more with James Merlino.
In the words of Scott Pape, more widely known as the Barefoot Investor, “letting a large multinational bank teach your kids about saving money and spending wisely is like asking Ronald McDonald to teach them about nutrition”. This analogy is quite apt, as the Commonwealth Bank also hands out branded plastic toys to students as a reward for their continued customer loyalty.
While I was talking with Glenn Fowler, the Secretary of the Australian Education Union Act Branch, he made similar comments. He put it to me that school banking is the equivalent of multinational fast-food chains running school canteens or, indeed, delivering food studies courses in schools. He said, “The primary interest the big banks have in this is in rusting-on young children as future mortgage holders and credit card users.” The Australian Education Union has, for some time—in line with its democratic decision-making processes—been putting the case to government that
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