By Rishika Dugyala
NEW YORK (Reuters) - Last year, Abbey Jones' high school routine had a twist. For 45 minutes each week, she became one of 15 student tellers at the Community Spirit Bank branch at Red Bay High School in Red Bay, Alabama.
Her job? To handle her peers' transactions and market the bank's student-specific accounts.
Community Spirit has used a digital platform to teach Red Bay students financial concepts for roughly five years. But since January 2017, students who receive parental permission can also open checking and savings accounts for a $1 fee to keep until they are 24.
"The easy access to come and deposit your money, it's just made us a lot more willing to take control of our finances," said Jones, 17.
Recent research suggests that pairing financial literacy efforts and tangible experience has a greater impact on positive money management: higher credit scores, less debt and higher savings rates. But there is some disagreement about how to measure that impact.
Initiatives are popping up all over the United States to help young people, lower-income communities and those lacking a formal banking relationship improve their interactions with the financial services industry.
For instance, Fifth Third Bancorp sends two empowerment mobiles to provide financial education and access to loans for low- and moderate-income community members within the bank's markets, which include Illinois, Tennessee and Ohio.
JPMorgan Chase Co, Santander Bank, Bank of America Corp and others partner with nonprofits and the public sector to provide easy access to accounts for summer youth employment program participants as they are coached on their finances.
In 2017, nonprofits America Saves and the Cities for Financial Empowerment Fund together saw more than 73,000 participants direct deposit into financial accounts through their summer employment programs. Fifth Third received more than 1,800 loan and product referrals through its empowerment mobiles in 2017. Following its launch, Community Spirit's in-school branch saw more than 200 accounts opened and $77,000 in deposits.
For decades, financial literacy efforts centered on digital learning modules, workshops and classroom lessons to teach people about managing money. Now some institutions are exploring new metrics to measure how adding the hands-on experience is changing behaviors.
San Francisco-based nonprofit MyPath attempted to do that with a program, supported by JPMorgan Chase, that provides financial coaching with real-world banking exposure. Of the 121 of 18-to-24-year-olds who participated for 2017, 85 percent improved their FICO credit scores, even those with damaged credit.
But most programs are not tracking the long-term financial health of participants, including growing emergency funds, contributing to retirement savings or saving for college.
Customers are wary of the system, too. The 2018 Edelman Trust Barometer found just 53 percent of the informed U.S. public trusts the financial services sector, a 20-point drop from last year. According to the Federal Deposit Insurance Corporation's biennial survey, roughly 9 million United States households in 2015 were "unbanked," meaning no one in the household had a checking or savings account.
Another challenge: Big financial institutions worry that a heavy-handed sales pitch will push customers away.
"We really do not try to sell PNC when we're teaching people," said Cathy Niederberger, managing director of Community Development Banking at PNC Financial Services Group Inc. "I can only imagine what a turn off it would be for somebody who thought they were coming in for good education and they feel like they got a hard sell."
JPMorgan Chase Office of Nonprofit Engagement head Courtney Hodapp said programs managed by nonprofits, like the summer employment ones, are more attractive. She explained that consumers in these programs can choose from a variety of banks and account offerings that have been validated by the third-party nonprofit.
It is a tricky line to walk, said Santander Bank's community partnership manager Toby Baba, but there is no other way to have "true line of sight" on impact.
"When we're teaching people about the different account options and banking services, naturally they want to know, 'Okay, what does Santander offer?'" he said. "I think when it's done right, coupling the two can help with trust."
(Reporting by Rishika Dugyala. Editing by Lauren Young and David Gregorio)