Interview with Reji Eapen from Pennybox. Innovative FinTech Teaching Kids the Value of Money

Reji_headshotAs part of our series on world beating entrepreneurs in Australia, Eden Exchange recently talked to Reji Eapen who is the founder of Pennybox. Pennybox is an educational app to teach kids about money and finance. It’s is a dynamic financial education tool for youngsters, and an innovative way to incentivise kids to learn real life lessons about money related concepts.

Thanks for speaking with us Reji. Firstly, what brought you into the world of business technology and apps? Can you tell us a bit about your background and career?

My pleasure, thanks for having me. I come from a deep-rooted education background. My mother was an educator in Melbourne for some 20 odd years and my father an Electronics Engineer. I’ve always been fascinated by entrepreneurship, education, finance, technology and super cool gadgets.

I went on to study Commerce and Information Systems at the University of Melbourne before taking my first job as a Technology Risk Advisor at Ernst and Young. I didn’t last long in that role, which led me to the Ernst and Young Corporate Finance team, where I spent two and a half years before accepting a job at Bank of America Merrill Lynch in Sydney as a Mining Research Analyst. From there I moved to UBS Investment Bank covering small cap industrial stocks, and finished up in mid-2014 covering the transport and infrastructure sector.

Throughout my corporate career I have always tried to stay close to education and career development for both myself and those around me. I also completed my Chartered Financial Analyst qualification
through the CFA Institue in 2011 which helped me to gain a deep understanding of personal financial planning and corporate banking concepts

One of my life goals was to start a business before I turned 30.  I think I’ve always been an entrepreneur at heart. When I was a kid growing up in Melbourne, I used to go around the neighbourhood and figure out ways to make money. When I was about 10, I had a car wash business, where I stood outside the car park of our apartment block in Box Hill and chase people down as they drove in and haggled them for $3 to wash and dry their car. Worked out pretty well actually, the business got so good that I had to hire my sister as my first employee! At 15, I set up a Spy-For-Hire business, where I would solve neighbourhood crimes and mysteries on a retainer of just $10.

What triggered the idea for Pennybox? What were some of the challenges you faced to get the business off the ground?

To be honest there were various triggers for Pennybox. The idea started evolving in early 2015 when my sister was going through a divorce. She’s a highly qualified Urologist and one of the most intelligent and independent women I know. I take a lot of motivation from her in my life. During the divorce, it became apparent that she was incredibly weak with her own personal finances. And, it hurt her. She was unaware of a lot of basic money related concepts, and I remember thinking that there must be so many people out there in a similar situation to her. I decided there and then that something needed to be done. I didn’t want my son or daughter to grow up with a poor understanding of money in the real world.

I decided to actually pull the trigger on Pennybox when I was on the bus into work one day and overheard a mother and son of maybe 10 years tapping away on his iPhone 6, and talking to his mum at the same time. He wanted his pocket money, and mum refused because he hadn’t done his chores at home. He argued that even when he does his chores, mum doesn’t pay up! Two thoughts came to mind immediately: Firstly, mum had the right idea, she was teaching her son about the value of money through practical tasks and chores, which is usually the first interaction kids have with money. Secondly, surely in this day and age there must be a more technologically advanced way for parents and kids to interact over pocket money. So, that week in November 2015, we started the initial development of Pennybox.

When we did our market research we understood one major hurdle we had to overcome – a lot of parents themselves didn’t understand money related concepts well enough to be comfortable teaching it to their children. For example, how many of us actually understand the concept of compounding interest? We use it every day in our credit cards and mortgages. So we decided the way forward was to bring the structured school framework into the home, but do it in a way that kids don’t feel overwhelmed, and parents can monitor their children’s progress like a report card. We started building a money education syllabus that we’ll very soon deliver through the app, directly to kids in a playful and dynamic way.

What geographic markets does Pennybox focus on? What makes it different?

We have a firm philosophy at Pennybox that basic money education and financial literacy should be freely available to every child. The socio-economic benefits of this, we believe, will be incredible.

We are launching Pennybox to the global community, starting first in dollar denominated countries and quickly thereafter into other countries and currencies, along with real money digital payments. To be simple, money concepts are generally universal, only the currency symbol really differs. Interest rates, debits, credits, etc., are the same all around the world.

Pennybox is different because we put our primary focus on education, and not payment services.

What stage of development is the  business in? Where do you see Pennybox in a year from now? What are your strategic priorities?

We are launching our first version of Pennybox in March 2016 for Android. iOS will be coming really soon. The initial version has simple but important functionality to engage both parents and children to start conversations at home about money. We leverage the chore for pocket money concept. Parents can list chores around the home and tag a dollar value for each task, while kids complete the tasks and collect a promise to pay from their parents, but at the same time being able to track how much money they have earned, and cash out with their parents when they want to spend.

In a year’s time, we hope to have functionality for real money payments as well as dynamic education modules delivered directly to children. The effect of this, we believe will be tremendous – kids can learn to responsibly earn, manage and spend their own money, while parents can monitor spending and track their children’s level of financial literacy at the same time. It’s like having a continuous report card on your phone of your child’s progress on financial literacy skills.

What major industry trends do you think entrepreneurs in your sector need to be aware of? How will Pennybox capitalize on these trends?

On the education technology side, adaptive learning and dynamic content delivery will be hot areas to watch. We are already building smart algorithms that will understand how kids interact with our content and angle education to them based on their age and level of financial literacy. On the financial technology side, advancements in payment services will be interesting to watch. We’re looking at ways to activate bank independency so that we don’t need to depend on legacy bank technology in order for kids to spend money from their Pennybox balance.

What advice do you have for someone thinking of taking the plunge into a startup venture for first time?

I’m a huge supporter of entrepreneurship, and will happily help anyone who is serious about it. But, it’s not for everyone. So, think long and think hard about whether you can support the risk-reward profile that comes with the start up world. If you have the self-drive, the motivation to succeed, and a great idea, maybe you can.  However, it’s not a fairy tale story like some will have you believe. I actually work longer hours than my previous investment bank jobs, but I love every single hour of it and driven by my motivation to change the way that people learn about money.

In your opinion, what makes a good entrepreneur?

That’s an interesting question. I don’t think there is any one single trait that makes an entrepreneur good at what he or she does. I think passion for what you do or what you build is a must. However, even more valuable than that is the ability to learn from your mistakes. I’ve hit significant hurdles as an entrepreneur, but I try and continue to learn every day about how to overcome them and how to not let it happen again, and those lessons just keep on coming!

What’s the most interesting part of your job?

In between development and building the app itself, I actually spend a lot of my time talking to parents and kids about the way they currently learn about money, and I love this part of my job because you hear all different kinds of stories and tales. The best one I can remember was the young 8 year old boy who said to me when I asked him how much money he’s saved up – “I don’t need money, cause I know my mum’s credit card number by heart!”

I have to say though, being able to bring all my skills and knowledge in Tech, Education and Finance spaces into Pennybox, has been probably one of the most rewarding experiences in my life so far!

Thanks for your time Reji

Pennybox is an app that invigorates the traditional pocket money concept for both parents and kids. It is aimed at kids aged between 6 and 16 to help improve their understanding of money-based concepts.

Pennybox is as much about financial education for kids, as it is a tool to manage pocket money and youth spending. Importantly, kids can earn and manage their own money, while parents can control and manage how that money is used.