FinTech Tools Help Teens Build Credit Amid Increase in Social Media Financial Influencers

Youths, personal finance, financial literacy

In a world where children and teenagers often grow up surrounded by screens and smartphones, a new breed of companies, particularly FinTech firms, is using the very technology that captivates young minds to teach them lifelong skills.

Through customized services, these firms are introducing youths to financial management, at a time when young consumers are seeking financial knowledge from diverse sources, including social media, financial education apps/tools, family, friends, as well as traditional channels like bank branches and financial advisers.

As noted in “The New Challenges Facing Finance: Algorithms, Finfluencers and the Quest for Reliability,” the latest report in PYMNTS Intelligence’s Digital-First Banking Tracker® Series, these offerings can go a long way to not only set the stage for responsible money handling but also empower families to make the most of their financial resources.

Take for example, Till Financial, a company focused on collaborative family banking. Earlier this month, the FinTech firm announced that it had partnered with Astra, an infrastructure provider for faster payments, to offer financial solutions designed for families as part of “Till’s mission of empowering kids and teens to become smarter spenders.” 

According to Taylor Burton, co-founder at Till Financial, the partnership will help serve “the unique needs of our families through financial literacy” by offering young consumers “the tools they need for instant, secure, and user-friendly fund transfers.” The company also offers features like savings goals, chores and allowance, while giving parents control over spending activity.

Greenlight, another startup catering to a younger audience, is also helping teens build and manage credit responsibly before 18, while their family earns up to 3% cash back on purchases made with Greenlight’s credit card.

“Building good credit may unlock a world of opportunities for your family, from better interest rates to lower monthly payments and ultimately, more money for your teen’s future,” the company said in an August blog post.

Similar to Tills’ offering, parents can also use Greenlight’s flexible controls to set monthly spending limits and track balances in the app as their teens build their credit, while receiving real-time alerts when purchases are made.

Giving kids and young people a good head start on their journey to financial independence was also the focus of a conversation between PYMNTS and Will Carmichael, CEO at U.K.-based youth-focused FinTech startup NatWest Rooster Money, earlier this year.

As Carmichael told PYMNTS, individuals form a lot of money habits by the age of 7, which is the reason why starting kids early, as young as 3, with strong money management skills is key.

He further highlighted the importance of making money “tangible” for children growing up in cashless societies, while encouraging families to learn about finances together so that parents can empower their children to build financial capability from an early age. 

NatWest Rooster is also looking to provide support for the various platforms and mediums that youngsters engage with, whether it’s related to gaming or social media, while establishing a safe and secure online setting for their transactions, he added.

This is even more critical now as social media platforms like Tik Tok are gaining prominence in the financial education space, capturing the interest of more than 60% of Generation Z with information that is sometimes inaccurate and unreliable, the PYMNTS Intelligence study stated.

“At its worst, Finance TikTok perpetuates financial myths, scams and dangerously misleading information,” Rebecca Jennings and Emily Stewart of Vox noted in the study. “What users end up seeing often isn’t good advice from trusted sources; it’s just one random person’s experience making thousands of dollars off buying and selling Tesla calls.”