Connecting with people in the context of their lives is critical to a product’s success, especially with personal finance. Angelique de Montbrun, COO at Mydoh, dissects how today’s youth are approaching financial literacy and how the market for youth finance has evolved.

They say that money makes the world go round. From the global economy to a personal savings account, the world exists on a fundamental need for strategic money management. Finance is at the core of many life experiences – and with age comes increasingly complex financial needs and concepts. As young people start to think about how they manage their personal finances, there is an opportunity for the financial industry to meet them where they are.

For over 15 years, Angelique de Montbrun, Chief Operating Officer at Mydoh, has had her finger on the pulse of the youth segment. She has a deep passion for building products with the purpose of serving the next generation and is working in a space whose inhabitants are hungry for meaning in an uncertain environment. This is especially prevalent when issues such as housing affordability and inflation frequently make headlines. In this changing market, Gen Z and Gen Alpha are looking for a place where problem-solving and purpose are intertwined.

Recently, Mydoh, a money management app for teens, collaborated with Leger to launch a survey on how Gen Z teenagers feel about money. The survey offers insights on the current financial priorities of this cohort, along with their outlook on life, finance, and everything in between. And as a parent to two teenagers, Angelique understands the importance of planning for a financial future as they inch closer to young adulthood. With 55% of Canadian teens saying they have already set financial goals for their future, she is optimistic – as long as these generations are equipped with the right tools.

Since Mydoh was introduced to the market in 2021, it has resonated with over 140,000 Canadians looking to build financial literacy for youth. In this sit-down, Angelique dissects how today’s generation of teenagers approach personal finance, and where Mydoh plays a critical role.

Drawing from your personal experience, what role has financial literacy played in your own life?

Growing up in an immigrant family, I was equipped with many financial literacy lessons. Like many other immigrant stories, it wasn’t easy for my parents. I watched them manage their small business, but it wasn’t until my adult years that I began to comprehend the complexities of the financial difficulties they shielded from us.

With that said, the concept of an allowance wasn’t necessarily a common practice in my family. Chores were our way of contributing to the household, while our parents provided food and shelter. But of course, I was persistent. Every week, I earned a toonie in exchange for my household contributions and would hoard them – otherwise known as saving. These toonies became the basis of my savings, and what I did with that first toonie determined how I managed money throughout my life. When I became a mom, I used the skills I fostered early in life to overcome a precarious financial position. As my kids grow older, the ability to have these open conversations with them allows me to reinforce the lessons I’ve learned from “hacking” my own finances, while tools like Mydoh give them the training ground for their own money management experiences.

In your opinion, what are the key differences between Gen Z and Gen Alpha in contrast to previous generations of teenagers when it comes to financial literacy?

One of the biggest differences is digitization. There are so many tools and resources that promote financial awareness, which make it more accessible for younger generations to understand basic money concepts. Today’s growing population of tweens and teens are accumulating knowledge – they’re more tuned in to what’s happening across the globe and how it impacts their financial future, which can be attributed to increased access to information via rapid media consumption.

The financial constraints that younger generations now experience weren’t as prevalent for older generations, such as the affordability of post-secondary education and housing. With 56% of young Canadians feeling the pressure to achieve financial goals by a certain age, they’re having more conversations and asking more questions in an anxiety-ridden context.

Another key difference is around how today’s parents talk about finances with their own kids. There was more stigma around financial transparency in previous generations, which was evident in speaking to my parents or people similar in age. It was perceived as inappropriate and rude to discuss information such as salary and savings. As a millennial and a parent, I’m having open conversations with my own kids – one of which is Gen Z, the other Gen Alpha. Both are interested in how much I make, the cost of a house, or what a mortgage is. In our recent survey, we found that 85% of teens are open to discussing money with family or friends to learn from their experience. The rise of “finfluencers” (financial influencers) on social channels have also contributed to more conversations around finance that appeal to a younger generation. For me, it’s promising to see that 80% of teens feel confident in their understanding of money.

What are the most important considerations for building financial products used by a generation of digital natives?

First and foremost, we want to build products that solve problems. From a financial standpoint, these problems are continuously evolving with time as they occur in the context of people’s lives. This is a key consideration, because a product made for 18 to 24 year-olds won’t necessarily suit 14 to 18 year-olds, or even 12 to 14 year-olds. They have different needs based on the stage of life they’re in.

With that, it’s also important to offer products that have the capacity to adapt during a pivotal time when kids move out of the 10 to 12 year-old phase and into the 12 to 14 year-old period. At this transition point, there are many financial milestones happening. Kids are becoming more financially independent from their parents, and thinking about spending decisions independently. This might mean going off-campus for lunch, or buying a limited skin that was recently launched in a video game. They might even start to pursue their first potential job, which offers an increased complexity with the receipt of a paycheque. As they go through their teenage years, the concepts of earning, spending, and saving start to have more real-world implications for their future.

Finally, we need to keep on top of innovation. Our survey shows that 63% of Gen Z’ers already use technology and apps to manage their money, so they’re aware of the financial tools being offered in the market. Young people don’t want financial products and services that were made for their parents. This generation has changing desires, which shift the ways that they interact with money. With a tech-savvy mindset comes an increased consciousness of how they interact with brands. Almost half (48%) of Gen Z teens being surveyed say that they’re less likely to buy based on social media recommendations, while eight-in-ten find it hard to trust products or services that seem to be too good to be true. They know that brands are trying to appeal to them, so a product or a service needs to resonate with their needs and values.

What did the market look like before Mydoh? Where did the need for Mydoh arise?

Prior to tools like Mydoh, young people were being provided with the same financial tools their parents were using. When parents were with a certain bank, kids were automatically tied to that bank once they received the debit cards attached to their parents’ accounts. From that point on, the relationship would be passive – they don’t get a ton of insight into their financial situation, including their spending and saving, and how they can budget towards their own savings goals.

Young people want greater control over their finances and to be a more active participant in their money management. This generation is increasingly knowledgeable about financial tools. When we started Mydoh, we developed the product on a shared belief that money management isn’t something that is taught, but something that should be learned through experience. And that experience should start early. Mydoh’s app and Smart Cash Card were built with families in mind, offering a balance between financial independence and parental oversight. The dynamic, digital and gamified experience was also designed with the day-to-day interactions between kids and parents in mind. And we won’t stop there. We will continue to evolve as the young people on our platform do. As they grow, we grow too.

As an in-house Venture being nurtured at RBCx, how has being a part of the broader bank supported the growth of Mydoh’s business?

As a personal finance product designed for parents and youth, Mydoh is uniquely positioned as part of a financial institution. That means we have over 150 years of deep knowledge, deep security and deep trust – all of which are integral to personal finance. From Mydoh’s perspective, we’re dealing with kids and their money. With kids, it’s important to have the bank-grade security of financial institutions to ensure their data, money, and right to privacy are protected. From that standpoint, we lean heavily into a lot of the infrastructures that have been built by RBC.

In general, RBC as an enterprise is moving the dial in the way of innovation. Much of our technology is backed by RBC, so we’re constantly exploring how we think about finance, along with how to deliver high-quality financial products in a safe and secure way while reducing the risk for our clients. We have a number of different people within leadership who have incredible backgrounds both from RBC, but also external to RBC. Our leadership team is really pushing us to innovate and think about the next frontier of youth finance. As a result, we’ve been able to tap into that expertise and start thinking about it in a meaningful way.

Looking ahead, how do you see the youth finance market evolving as a piece of the broader personal finance market?

We’re in the midst of a pretty massive wealth transfer. As a generation of boomers transfer wealth to their families, there’s going to be an influx of generational access to finances as it continues to trickle down. When younger generations inherit money, it’s important to ensure that they are ready. Cultivating a stronger economic situation starts with early education.

We already see that Gen Z are moving away from traditional banking and embracing digital banking. Simply put, they approach money differently than their parents did. This generation also appears to be more aware of the socio-economic factors that also influence personal finance, such as unstable employment, the gender wage gap, and the rising cost of post-secondary education. As youth become more financially aware and can make their own decisions around money, the market will need to evolve to deliver digital-first experiences that drive financial goals like saving for their first car, investing, or building a credit score.

Our mission at Mydoh is to “empower the next generation to live the life they want.” In order to fulfill that vision, we need to think differently as a financial institution and meet Gen Z and Gen Alpha where they are. RBCx and the broader bank helps us do just that.

To learn more about Mydoh, visit mydoh.ca.

This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.

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