Bank of America Introduces Family Banking to Empower Parents in Overseeing Children's Finances
In the ever-evolving world of banking, family-focused products are gaining traction. Following in the footsteps of Bank of America, several banks and fintech companies have launched family banking-related products. These offerings typically include kid- or teen-focused banking apps, parental controls, and educational features.
Leading the charge is Greenlight, a popular educational kid banking app that offers prepaid debit cards and parental controls, along with chore tracking and allowance features to help teach kids about money. Acorns Early, formerly known as GoHenry, is another top contender that combines banking services for kids with investing opportunities and parental oversight.
Other notable fintechs providing family-friendly banking apps include Till, Step, Revolut, Modak, and Current. These platforms offer free kid banking apps with debit cards linked to spending accounts, enabling parents to supervise transactions and schedule allowances. FamZoo, known for its robust family banking experience on desktop, offers prepaid cards and virtual accounts for kids, complete with parental controls and allowance management.
Traditional banks are not far behind. Many large banks offer kid-friendly checking account products, often in partnership with fintechs to provide digital tools. However, fintech apps currently lead in innovation and user experience for family banking.
Bank of America, with its comprehensive retail banking approach, is making strides in this space. Although it competes with these fintechs in providing family banking-friendly features such as linked accounts and parental controls, it also boasts physical branches and digital integration. Other banks like Capital One and NBKC offer alternatives appealing to families but may lack dedicated family banking apps.
The family banking space is vibrant, with numerous fintech apps specializing in kid and teen banking experiences and some traditional banks integrating family banking features within broader product suites. This aligns with the trend of helping young people learn financial responsibility under parental oversight.
Here's a summary of some notable players in the family banking market:
| Company/Bank | Product Focus | Features | |--------------------|--------------------------------------|-------------------------------------------------| | Greenlight | Educational kid banking app | Prepaid cards, chore tracking, parental controls | | Acorns Early | Kid banking + investing | Parental oversight, investment aspects | | Till, Step, Revolut| Free kid banking apps | Debit cards, allowance scheduling, spending controls | | FamZoo | Desktop family banking | Prepaid cards, virtual accounts, parental controls | | Bank of America | Traditional bank with family features | Linked accounts, parental controls, branch access | | Capital One, NBKC | Alternatives with youth accounts | Standard checking, some youth-friendly features |
These products all share the goal of promoting financial literacy and controlled spending within family banking contexts. The Bank of America family banking product, designed for parents with children younger than 16, allows parents to set limits on a child's spending and ATM withdrawals, facilitate financial education conversations, and offers real-time alerts about their child's transactions.
As the product rolls out in three states before launching nationwide in December, Bank of America sees its family banking product as a means of serving the needs of clients who are just starting out and growing into a larger part of the bank's income. The bank developed its family banking product in-house, rather than partnering with a fintech.
Looking ahead, Bank of America plans to add savings and potential investments to its family banking product, as well as more features and functionality. Establishing a relationship with younger consumers early on and growing with them is a key part of Bank of America's growth strategy. The bank is open to considering partnerships when deciding on additional functions to add to its family banking product.
Despite the growing competition from fintechs, Hines Droesch, a representative from Bank of America, downplayed the idea of fintechs offering significant competition in the family banking space. He appreciates fintechs and watches what they're doing, but believes that banks have the scale and depth of capabilities that fintechs lack. The bank did not provide any specific market share opportunities or targets for its new family banking offering.
In conclusion, the family banking landscape is bustling with activity, as both fintechs and traditional banks strive to offer innovative and user-friendly products that teach financial responsibility to the younger generation under parental oversight.
- As Bank of America launches its family banking product, it aims to combine the traditional bank's advantages, such as physical branches and digital integration, with the innovative features offered by fintech apps, thus promoting financial literacy and controlled spending within a family context.
- The thriving family banking market sees both fintechs and traditional banks focusing on providing products that teach financial responsibility to the younger generation, with the goal of forging relationships early on and growing alongside these clients.
