• Queensland has announced it will remove the Commonwealth Bank’s much-criticised Dollarmites program from its schools.
• The state joins the ACT and Victoria in its rejection of school banking schemes, which have been criticised by the Australian Securities and Investments Commission.
• ASIC found that school banking program providers fail to effectively disclose that a strategic objective of these programs is customer acquisition, not education around money.
• Visit Business Insider Australia’s homepage for more stories.

The Queensland government announced today it would axe the Commonwealth Bank’s school banking program, following the recommendations of a “damning” report that found the scheme was designed to cultivate brand loyalty, not educate.

Queensland Education Minister Grace Grace announced the cancellation of the ‘Dollarmites Club’ today and said the state’s students already receive “extensive financial literacy education.”

“It’s a different digital world now to when school banking began more than 50 years ago,” Grace said when announcing the decision.

In a statement, Grace also said the report released by the Australian Securities and Investments Commission investigating the efficacy of school programs led to the state government’s decision.

“The ASIC report demonstrated that there was little value in the program, and often the true intention of the program wasn’t disclosed,” she said.

In a statement released today by Consumer advocacy group CHOICE, its Banking Expert Patrick Veyret said the organisation welcomed the decision by the Queensland Government, calling Dollarmites “a corporate marketing exercise disguised as financial education.”

“Commonwealth Bank has had a free ride in our schools for over 90 years, signing up customers for life and all the debt that comes with it,” Veyret said, adding “Commonwealth Bank should cut their losses, dump the Dollarmites and donate to independent financial education programs instead.”

School banking programs facilitate the establishment of bank accounts for students, with the most popular program the Commonwealth Bank’s Dollarmites program, which develops arrangements for students to make ongoing deposits into those accounts while at school.

The Commonwealth Bank’s school program has been operating for nearly 90 years. It was first instituted when the bank was still government-owned and operated in 1931.

The decision follows moves made by Victoria in November last year and the ACT in February, which ruled unanimously to ban school banking programs from public classrooms in February this year.

In 2020 an ASIC review of school banking programs found that while such programs claim to help children develop long term savings habits, “providers were unable to demonstrate that these programs in and of themselves improve savings behaviour.”

It also found that payments schools receive for implementing programs incentivise them to encourage participation, and that school banking program providers fail to effectively disclose that a strategic objective of these programs is customer acquisition.

Finally, the report ruled that “young children are vulnerable consumers” who are being exposed to sophisticated advertising and marketing tactics by school banking program providers.

CHOICE called for the states continuing to run school programs; New South Wales, Western Australia, South Australia, Tasmania and the Northern Territory to follow Queenland in removing bank marketing out of schools.

“It’s only a matter of time before the other states and territories act on this marketing program targeted at Australian kids,” Veyret said.

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