South African government to ban banks from running financial education programs in schools

The South Australian government has said banks will be barred from teaching financial literacy in state schools by the end of the year.

Education Minister Blair Boyer said the move would prevent institutions from using subtle marketing techniques to enroll young children in lifetime accounts.

He said this would prevent institutions from using subtle techniques to win over customers at an early age.

“Predatory behavior in some ways from financial institutions looking to use school banking programs as a way to build lifelong relationships, if I may say so politely, and you know you have them as customers for the rest of their life,” he said.

The move fulfills a Labor election promise made in 2021.

Schemes like Dollarmites – run by the Commonwealth Bank – are already banned in Victoria, NSW, Queensland the ACT.

Commonwealth Bank closed Dollarmites last year.

BankSA had a similar program called Little Savers which stopped operating in schools in 2014.

Boyer said a financial literacy advisory group would be formed to provide advice on up-to-date and appropriate resources that should be used in schools.

“Some states have already moved after the federal royal commission to financial institutions to prevent banks and credit unions from being involved in these kinds of programs,” he said.

In 2018, the ABC revealed that Commonwealth Bank paid nearly $400,000 to state schools in Queensland in 2017, to enroll children in its school banking scheme.

However, South Australia’s Department of Education has admitted it has no idea how much Commonwealth Bank pays state schools to run its Dollarmites school banking scheme.

The South African government keeps no records of which schools participate in the scheme, which has been running since 1931, and has no control over the materials the bank provides to schools, a Freedom of Information request has revealed. .

Sarah J. Greer