Local banks connect with young customers

“We have a program that we offer to Branson elementary school students that gives those students a background in what banking is for and information about checking accounts, saving accounts, loans – all those sorts of basic banking services – on a very fundamental scale,” said Craig Richards, the bank’s CEO. “That exposes those kids to the various types of services that banks offer and the importance of regular, systematic saving.”

The bank is not alone in its efforts.

The American Bankers Association says that an alarming number of young people don’t have the basic financial knowledge they need. A 2006 study conducted by the JumpStart Coalition about high school seniors’ knowledge of personal finance basics showed that, on average, the students answered 52.4 percent of questions correctly, and only 6.9 percent of students scored a “C” or better on the quiz.

Those figures are all the more alarming when combined with information from the Federal Reserve that shows only 47.1 percent of U.S. households had a savings account in 2004, down 8 percent from 2001.

That’s why local banks are increasing their efforts to expand financial literacy among students.

“It’s not something that we’ve done a lot of in the past, but … it is one of the emphases we’d like to have this year – to partner in education with schools,” said Teresa Blair, executive vice president of Guaranty Bank.

Blair, who has taught financial education classes in area schools in the past, said banks would do well to take advantage of young children’s natural curiosity.

“Most kids see a bank from the car through the drive-through with their parents,” she said. “They don’t go inside and understand what happens to their money. Education gives them a better insight into what happens and a better appreciation as they get older as to why (banks) work the way they do.”

Even legislators are taking notice of the need for financial education – Senate Bill 790, introduced to the Missouri Senate before the beginning of the 2006 legislative session, would have required all Missouri high school students to take personal finance courses for each of their four years in high school.

The bill died in committee during the 2006 session.

Potential payoff

In addition to getting into the classroom, Ozark Mountain Bank sponsors football, band and debate programs at area schools. It also is footing the $2,000 annual bill for the TigerCast program for the Hollister R-V School district. TigerCast is a free e-mail and text messaging system through which students and their parents can receive announcements, emergency information and news about school closings and special events.

In exchange for the costs associated with efforts to reach children, the banks are gaining exposure to potential future customers who, according to statistics, will have money to spend.

And those new audiences have access to a lot of disposable income – ABA said that teens in America spent $159 billion in 2005, and the number is only expected to grow in coming years.

Making contact with future spenders is important given the personal nature of banking, said Guaranty Bank’s Blair.

“A banker (who) forms a relationship with a child early on can have a relationship that lasts a long time,” Blair said. “And that relationship can be an educational one and not just a financial one.”

Richards, however, says exposure to new audiences isn’t Ozark Mountain Bank’s main reason for reaching out to younger people.

“We don’t do what you might call a sales presentation,” Richards said. “Of course, we hope that Ozark Mountain Bank will be in their mind when they decide to avail themselves of those services, but it’s more about education than it is, at that point in their life, about selling bank services.”[[In-content Ad]]