Tuesday, 24 January 2017 00:03

Barbara Daroca: The Financial Logic of a Tween

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I spent some time with my family over Christmas and had a chance to talk to my niece. She’s at that weird stage in life where she’s not a little girl anymore but not yet a full adult, so conversations range from very basic “I-hate-spinach” tirades to philosophical debates about life and love.

My niece loves horseback riding and devotes a lot of her time and all of her hard earned pocket money to that hobby. We often talk about forecasting what she wants to buy so she can make a plan on how to save up for it. It’s fun to see how she negotiates with her parents for advances on future earnings when she sees a good deal – while, in the same breath, offering to babysit for us for free. The financial logic of a tween.

And this year, on Christmas Eve, my brother-in-law suddenly turned to me and said: “You work at a bank, explain to her why she should put her savings in her savings account.” If you’ve been following this column, you can probably imagine the surprised look on my face. My niece preferred to keep her savings in her piggy bank in her room rather than in her savings account! We started talking about the advantages of keeping her money in the bank: it would be kept safe, she could earn interest on it (and then interest on interest!), she could consult her account balance online at any time from the comfort of her room, she could pay with her debit card and also withdraw money with it whenever she needed some, she could review all her transactions which could help her understand better how much money came in and went out, and with what frequency…

She waved me off and asked very seriously (the way only tweens can do): “And what happens if I ever lose my card? Then I’ve lost all my money!” At first, I thought that she was talking about theft or even fraud but then it became clear she was worried about how the bank would know it was her money if she presented herself one day in a branch and asked to have it back. The simple yet brilliant logic of her argument (anyone looking a little like me could walk in and say they were me) is actually what keeps many of my colleagues busy all year long: preventing identity theft and fraud. Not only banking staff, but also regulators work around the clock to make banking as safe as possible. The result sometimes involves fastidious procedures and lengthy account opening forms… but now my niece is convinced it will not be that easy to trick her bank into giving her money to someone else.

And though still a tween, she’s already putting her money to work. What a great way to start 2017!

Barbara Daroca

Barbara Daroca is the Head of Corporate Services at ING Luxembourg.

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