Money still doesn’t grow on trees.
Despite the advancements and convenience the fast-paced digital world is bringing financial services, it doesn’t change the wisdom contained in this age-old phrase: namely, money has value and it (usually) takes effort to earn it.
What we do need to change is the way we impart this wisdom to our kids now that cash – physical coins and notes – is something we see, touch and use less often.
As a kid, I would cherish the shiny coin Dad gave me for washing the car because I knew what that coin could unlock. As I got older, I started to receive a regular allowance for doing various jobs around the house and for generally being a good member of the family. This ‘pocket money’ taught me some key things while I was young: cash = money, money can be exchanged for goods and services, and money requires effort to earn.
I also learned that once I’d spent my money, that was it. And because I received only a small amount each week, if I wanted to buy anything big, I had to put some aside and save it. These early experiences with money helped me appreciate the value of working hard and being a productive member of society, and also helped instil good financial habits, such as saving – the very same habits and values my wife and I are trying to pass on to our children now that we are parents.
But it’s quite surprising how challenging it has become to teach our kids about financial literacy now that society, and not just in New Zealand, is increasingly parking clunky cash for more convenient, electronic forms of payment.
Statistics in New Zealand indicate anywhere between 70-90 percent of everyday consumer transactions are already non-cash. And that isn’t a trend that looks like reversing anytime soon.
- Read more about ASB's innovation journey with Clever Kash here.
So, instead of seeing the dollar notes go out and the change come back, our kids are more likely to see a contactless credit card transaction or transfer made via smartphone on a mobile banking app.
Moneyboxes are collecting dust more than coins, parents rarely have cash on them to be able to reinforce pocket money habits, and money is becoming an increasingly ethereal concept to our kids.
The intangibility challenge
Cash works as a tool for teaching kids the value of money because it connects to how they learn about numbers. We learn to count with physical materials, like fingers or counters, before we are able to count in our head.
Also, because cash is a physical material that we exchange for value, it has built-in features that promote an understanding of scarcity (once it’s gone, it’s gone!) and loss for gain (hand it over to the shopkeeper in order to receive your goods).
For generations, cash has been the ‘bridge’ between the intangible concept of money and the tangible world we live in. When you remove that bridge, you remove that connection, and people are left stranded trying to figure out ways to magically pick up the habits and knowledge that we once used cash to impart.
Two years ago, ASB recognised we needed a new bridge to teach kids about money management and we wanted to approach the challenge by thinking more like a technology company than a traditional bank. This meant embracing new ways of operating and working with partners, exploring new materials and methods, connecting directly to customer insight, and iterating and evolving. And it meant pushing ourselves and seeing whether we could use tools in our digital world.
Just when the future of the piggy bank looked dim
This was the approach behind the creation of ‘Clever Kash’, a digital makeover of ASB’s historic ‘Kashin’ elephant-shaped moneybox. The new cashless moneybox, which was developed alongside Saatchi & Saatchi, is a toy elephant with a screen on its belly that displays the child’s savings balance on demand. Clever Kash interacts with the ASB mobile banking app, which enables parents to ‘swipe’ virtual notes and coins from their smartphone screen towards the elephant, as kids watch the display update on the screen. And it helps reform a tangible connection with money in a couple of ways.
Firstly, the device itself is something the child can have and own. It is a physical object that doesn’t look out of place among other childhood treasures. Secondly, everything about the ‘payments ceremony’ (whereby the account balance is updated) is designed to be as tangible as possible, from the shaking of the device to turn it on, to the speaker and sounds that celebrate interactivity, to using the connection formed through touching a smartphone screen and physically moving the cash across the screen ‘off the phone’.
Like other tech companies, we went to market with the ‘beta’ prototype late last year, before moving into a limited release of pilot devices for customer feedback. Now that the problem and solution have been validated, the refined Clever Kash is due for wider roll-out later this year and a patent is pending.
The ‘what’ of being a bank hasn’t changed, but the ‘how’ has—and it will continue to do so. From the adoption of real-time banking back in the ‘60s and ‘70s, to phone and internet banking in the ‘80s and ‘90s, to social and mobile banking today, ASB has a history of innovative firsts and an even deeper history of solving customer problems using technology. And you can add Clever Kash, which aims to put the magic back into pocket money, to that list.
James Bergin is the chief architect at ASB and father of three young children. This article is based on a talk he gave at TEDx Auckland 2016.
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