ASIC has released Report 676 which sets out the key findings of a review of school banking programs.

The review was undertaken to determine the benefits and risks of school banking programs. ASIC sought to identify why banks, schools, and students engage with these programs, understand whether banks assess the impact of their programs on students’ savings habits, and analyse the long-term impact on children of marketing through these programs.

ASIC identified 10 school banking program providers. Of these 10, CBA operated programs in 3,629 schools out of a total of 3,928.

Key findings

• School banking programs claim to help children develop long term savings 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.

Based on findings from the review, ASIC has developed a set of questions which school communities could consider to assist them in assessing and implementing school banking programs.

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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.