School banking program no longer supported in NSW public schools

What is the School Banking Program

School Banking Programs facilitate the establishment of bank accounts for students. These programs support arrangements for students to make ongoing deposits into those accounts at school. Today’s school banking programs are offered by a variety of Authorised Deposit-taking Institutions (ADI) including banks, charitable institutions, credit unions, building societies and other mutual organisations.

Program Update

On 15 December 2020, the Australian Securities and Investments Commission (ASIC) released a review of school banking programs.

The review found that the benefits of the program were outweighed by the costs such as minimal evidence demonstrating improvement to savings behaviour, that young children are vulnerable consumers exposed to sophisticated advertising and marketing and that the strategic objective of providers is customer acquisition and commercial gain.

What are we changing

On 24 October 2021, the Treasurer and the Minister for Education and Early Childhood Learning announced that the school banking programs will no longer be run in New South Wales schools from 2022.

We are supporting schools to disengage from Authorised Deposit-taking Institutions (ADI) on the program.

To further support our students with financial literacy education, we launched the Treasurer’s Financial Literacy Challenge in collaboration with ASIC. The challenge is currently in pilot intended for students in Years 5 to 8 but open to all and aims to engage students in practical activities focused on making informed financial choices, setting goals and managing money.

How to wind down the program at your school

We have consulted with key stakeholders to ensure support materials on the process to wind up the program are targeted and useful. These materials can be adjusted to support school communities through this change.

Dear Parents/Carers

On 24 October 2021, the Treasurer and Minister for Education and Early Childhood Learning, the Hon. Sarah Mitchell MLC, announced that school banking programs will no longer be run in New South Wales schools from 2022.

School banking programs at [our school/school name] are arranged at a local level [via the schools’ P&C Association/directly with the school]. With the upcoming cessation of the program, students will no longer be able to deposit savings through the school banking program at [name of school]. You can still keep your child’s bank account open and can continue to make deposits into your child’s accounts through online transfer or at any bank branch. More information are available on the department’s school banking website and Commonwealth Bank of Australia’s school banking website.

The decision was made following the review of the Australian Securities and Investments Commission (ASIC) review on School Banking Programs on 15 December 2020, which found that the costs of the program outweighed the benefits.

Key findings of the review include:

  • School banking programs claim to help children develop long term saving habits; however, providers were unable to demonstrate that these programs in and of themselves improve savings behaviour;
  • Payments to schools for implementing school banking programs incentivise schools to encourage greater participation in the programs;
  • Young children are vulnerable consumers and are exposed to sophisticated advertising and marketing tactics by school banking program providers;
  • School banking program providers fail to effectively disclose that a strategic objective of these programs is customer acquisition.

Financial literacy is embedded in the curriculum K-10. It is part of a continuum of learning in the work and enterprise learning across the curriculum content area from K-12. In Mathematics K–10, students develop knowledge, understanding and skills specifically related to financial literacy, such as money, financial transactions, pay rates, taxable income, rebates and levies. In Stages 4 and 5 many students elect to study commerce. A key objective of the Years 7–10 commerce syllabus is for students to develop skills in decision-making and problem-solving in relation to consumer and financial issues they may encounter now and in the future. Opportunities also exist for the inclusion of financial literacy in the mandatory Life Ready course in Stage 6. More information on the NSW Curriculum is available.

To further support our students with financial literacy education, the department launched the Treasurer’s Financial Literacy Challenge in collaboration with ASIC. The challenge is currently in pilot intended for students in Years 5 to 8 but open to all. The challenge aims to engage students in practical activities focused on making informed financial choices, setting goals and managing money.

If you have further questions, please feel free to contact the school on [details of the contact person at the school].


Kind Regards

[NAME OF PRINCIPAL]

[SCHOOL NAME]

Dear P&C Association Members of [School Name]

On 24 October 2021, the Treasurer and Minister for Education and Early Childhood Learning, the Hon. Sarah Mitchell MLC, announced that school banking programs will no longer be run in New South Wales schools from 2022.

As school banking programs are managed at a local level commonly by the P&C Association, I’m seeking your support to assist with next steps required to wind down the program with the school banking provider (mainly with Commonwealth Bank). The department has released guidance materials following consultation with the P&C Federation to support members with the process. Parents and Carers can still keep your child’s bank account open and can continue to make deposits into your child’s accounts through online transfer or at any bank branch. More information are available on the department’s school banking website and Commonwealth Bank of Australia’s school banking website. Further updates on next steps will be provided by us in due course.

The decision was made following the review of the Australian Securities and Investments Commission (ASIC) review on School Banking Programs on 15 December 2020, which found that the costs of the program outweighed the benefits.

Key findings of the review include:

· School banking programs claim to help children develop long term saving habits; however, providers were unable to demonstrate that these programs in and of themselves improve savings behaviour;

· Payments to schools for implementing school banking programs incentivise schools to encourage greater participation in the programs;

· Young children are vulnerable consumers and are exposed to sophisticated advertising and marketing tactics by school banking program providers and;

· School banking program providers fail to effectively disclose that a strategic objective of these programs is customer acquisition.

The P&C Federation will also send through similar communications to its members shortly.

Financial literacy is embedded in the curriculum K-10. It is part of a continuum of learning in the work and enterprise learning across the curriculum content area from K-12. In Mathematics K–10, students develop knowledge, understanding and skills specifically related to financial literacy, such as money, financial transactions, pay rates, taxable income, rebates and levies. In Stages 4 and 5 many students elect to study commerce. A key objective of the Years 7–10 commerce syllabus is for students to develop skills in decision-making and problem-solving in relation to consumer and financial issues they may encounter now and in the future. Opportunities also exist for the inclusion of financial literacy in the mandatory Life Ready course in Stage 6. More information on the NSW Curriculum is available.

To further support our students with financial literacy education, the department launched the Treasurer’s Financial Literacy Challenge in collaboration with ASIC. The challenge is currently in pilot intended for students in Years 5 to 8 but open to all. The challenge aims to engage students in practical activities focused on making informed financial choices, setting goals and managing money.

If you have any questions in relation to this process, please feel free to contact the school on [details of the contact person at the school].

Thank you for your ongoing support.

Kind Regards

[SCHOOL PRINCIPAL NAME]

General Q&As

What is a School Banking Program?

School Banking Programs allow students to deposit money into bank accounts provided by Authorised Deposit-taking Institutions (ADIs) such as banks, credit unions and building societies through their school.

What has changed?

From 2022, students will no longer be able to deposit savings through a school banking program at their school.

Who does this apply to?

This is applicable to all New South Wales government schools.

Why are school banking programs ending?

The findings from ASIC’s review of school banking programs highlighted that there is very little evidence to suggest that school banking programs help students improve financial literacy.

Students are vulnerable consumers exposed to sophisticated advertising and marketing with the strategic objectives of these programs being customer acquisition and commercial gain. It has been decided that the program is not aligned with the department’s values and objectives in leading and developing educational outcomes for students.

Teachers and families have also raised concerns about the quality of financial literacy education delivered by school banking programs and the marketing strategies used by providers to attract children with prizes and incentives to develop trust and loyalty at an early age.

Are there any exemptions from this?

No. Cessation of School Banking Programs will be effective from 2022.

What will be replacing School Banking Programs?

The Treasurer’s Financial Literacy challenge replaces school banking programs. The Department aims to pick up all the benefits of the School Banking Program into the Financial Literacy Challenge with the key difference being not being associated with a key consumer financial organisation, which ASIC found to be inappropriate.

The challenge is currently in pilot intended for students in Years 5 to 8 but open to all. The challenge aims to engage students in practical activities focused on making informed financial choices, setting goals and managing money.

School-based staff.

How do I disengage from a School Banking Program?

School banking programs are governed by the Department’s Commercial Arrangements, Sponsorship and Donations Policy available at https://education.nsw.gov.au/policy-library/policies/pd-2009-0399.

The Department’s Commercial Arrangements, Sponsorship and Donations procedure allows schools to exit existing arrangements without cause. To disengage, schools must give the sponsor notice by sending a letter (in writing) or email of termination.

The amount of notice required is set out in the sponsorship agreement between the school and/or the Parent and Citizen Association and the sponsor.

How do I disengage from a School Banking Program with Commonwealth Bank of Australia?

Commonwealth Bank of Australia will be providing more information about the next steps required to wind down the program with their School Banking Coordinators closer to the end of the year.

Visit Commonwealth Bank School Banking website for more information.

How does ending School Banking Program impact fundraising opportunities for schools?

This change will mean that schools will no longer be able to receive any incentive from ADIs running the school banking program. Such programs do not generate much revenue for schools and the impact is anticipated to be small.

In light of the Australian Securities and Investments Commission (ASIC) review of school banking programs, the benefits of ceasing school banking programs are expected to be significant and reduces the likelihood for ADIs to take advantage of young children through sophisticated advertising and marketing measures at an age when they can’t analyse and assess the quality of financial services they are receiving.

Where do I go with additional questions about school banking programs?

Schools that have additional questions and/or require additional support can contact schoolbanking@det.nsw.edu.au.

Parents

My child uses school banking programs regularly. How can they continue their banking?

Parents and carers can continue to keep their child’s bank account open and can continue to make deposits into their child’s accounts through online transfer or by visiting the ADI’s branch.

How can my child learn about Financial Literacy once the change takes effect?

Financial literacy is part of the New South Wales curriculum K-10. There are a range of existing resources for teachers to support financial literacy including Department’s Life Ready course and ASIC’s MoneySmart resource.

To further support students with financial literacy education, the Department launched the Treasurer’s Financial Literacy Challenge in collaboration with ASIC. The challenge is currently in pilot intended for students in Years 5 to 8 but open to all. The challenge aims to engage students in practical activities focused on making informed financial choices, setting goals and managing money.

Where do I go with additional questions about school banking programs?

Questions about school banking programs should be directed to their school.

Definitions

Authorised Deposit-taking Institutions (ADI)

ADIs are institutions like banks, credit unions, building societies and other mutual organisations that offer deposit products in Australia. ADIs are supervised by the Australian Prudential Regulation Authority (APRA) and must comply with the Corporations Act 2001.

School Banking Programs (SBPs)

SBPs are programs where an ADI offers deposit products to the students at a school; these students are encouraged to establish bank accounts and make ongoing deposits into those accounts at the school.

More Information

Read the media release and visit the Commonwealth Bank of Australia’s School Banking website.

Contact us at schoolbanking@det.nsw.edu.au

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