Latest Cornerstone Advisors report explores how financial institutions can serve the next generation of banking customers by offering a family digital wallet experience
Rego Payment Architectures, Inc. announced the release of “The Rise of Family Digital Wallets: Unlocking Opportunities for Banks and Credit Unions,” a new research report from Cornerstone Advisors.
“Family digital wallets” provide children with a digital-first approach to banking with features and functionality that allow their parents to monitor and control their behavior. The report explores how family digital wallets can help financial institutions address the needs of underserved banking generations.
According to the report, there are roughly 53.4 million children between the ages of five and 17 in the United States, representing roughly 16% of the population. This group includes Generation Z (born 1995-2009) and Generation Alpha (born after 2009), and accounts for more than $360 billion total in disposable income from allowances, “side hustles,” and part-time jobs.
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Though the opportunity to capture the next wave of financially active customers is growing, few financial institutions have developed child-centric banking apps or family digital wallets either on their own or by partnering with third-party companies, the report observes. These solutions can offer kids a sense of financial freedom and education while letting parents easily track and control spending.
“Many banks and credit unions are finding it challenging to attract younger customers with their existing products, and this can have an impact on both their consumer and business relationships,” said Tristan Green, director at Cornerstone Advisors and author of the report. “The viable methods that the report discusses can enable financial institutions to establish stronger relationships with these younger customers and position both the customers and the institutions for long-term success.”
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The report presents multiple ways financial institutions can integrate digital wallets into their strategies to establish stronger relationships with younger customers and addresses system implementation, deployment and compliance considerations.
“Banks and credit unions can not only tap into the $360 billion purchasing power of these younger generations but do so in a way that adheres to a tighter regulatory environment that lets parents stay in control,” said Peter S. Pelullo, CEO of REGO, a white-label family digital wallet platform provider for financial institutions. “Financial institutions have a unique opportunity to provide a generational banking experience that meets the needs of tech-savvy Gen Z and Gen Alpha customers.”
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