The CBA’s school banking program will be broadened in primary schools despite coming under fire from politicians and financial advisers at a Senate Inquiry.
The bank’s CEO, Ian Narev, said that the bank would be doubling its investment in financial literacy programs within schools, describing children as young as five as “customers”.
However, Narev hit back at claims that the CBA was promoting banking to children through a predatory marketing program.
This month, a Senate inquiry into credit card lending heard that the CBA’s Dollarmites initiative, which teaches children banking, should be banned from schools because it is used to lure future credit-card customers.
Under the $50m initiative, more than 1 million students will be put through the "Start Smart" interactive financial literacy programme over the next two years.
The bank's expansion into educational institutions over the past six years has seen the number of CBA Youth Saver accounts increase more than 300% at 3,600 Australian schools, from 75,000 in 2009 to 273,000 in 2015.
Labor Senator, Sam Dastyari, told the Senate inquiry that the program was akin to “Dracula running the blood bank”.
However, Narev said the program was beneficial for children as well as schools.
"We are happy to get early customers early on. That is definitely a benefit of school banking,” Narev said on Monday.
Financial adviser Scott Pape of Barefoot Investor described Dollarmites as a marketing program and a database, saying it was “the equivalent of having Ronald McDonald teaching kids about nutrition”.
The inquiry heard that the bank had sent former Dollarmites children letters to apply for their first credit cards once they had turned 18.
Dastyari said the programme locked kids into banking with the $120bn institution for the rest of their lives.
"You're more likely to leave your partner than your bank," Dastyari said.
Narev defended the program, saying the bank would be a "fool" to turn its back on its relationship with children.
He added that the increased investment in education through the Start Smart programme, a $6m Teaching and Learning Toolkit and a possible Principals Financial Leadership academy, was because his business relied on a productive economy.
"The number one reason we are doing this is because our success depends on the economy and that in turn depends on successful education," Narev said.