Chase aims to lock in clients early with kids account
/JPMorgan Chase launched Chase First Banking, a fee-free account to allow Chase customers to offer their children bank accounts. Chase’s kids account rollout follows the footsteps of fintechs seeking to create financial tools for parents seeking to teach their children budgeting and personal finance management habits, while offering capabilities to send payments to their kids, set spending limits, and receive alerts on account activity. Chase First Banking doesn’t include overdrafts, check writing, ACH transfers or wires, positioning itself as an educational and convenience banking tool for parents. Chase First Banking completes the circle of Chase’s products for young people, including Chase High School Checking and Chase College Checking, paths to help create a customer for life as needs change over time. Fintechs, including Current and Revolut have also introduced kids accounts. It’s telling that Chase chose to collaborate with Atlanta-based fintech Greenlight, which specializes in accounts for financial products for kids, instead of building the product internally.
According to Lindsay Davis, director of Caliber Intelligence "Chase is partnering for two reasons. The first is previous attempts to build the tech in-house have fallen short of customer expectation. The most notable failure was Finn, its neobank the firm shuttered just one year after launching. Another reason is deposits are at record levels during the pandemic which are the lifeblood of a bank. Fintech apps have also surged in popularity among next-gen customers and many are or have plans to get into digital banking which puts deposits at risk for bulge bracket banks. By partnering with fintech Greenlight, Chase can accelerate the time-to-market versus building the product in-house."
