BC Business
The Hero Financials product comes with a SideKick Mastercard, which can be used both in-store and online.
The CEO of Vancouver-based fintech company Hero Innovation Group has an interesting story to share about how financially literate Gen Zs are (or, in this case, aren’t). Peter MacKay’s son was a first year UVic student when his buddy walked in wearing a very nice leather jacket.
“I bet that cost you a pretty penny,” said MacKay’s son. “How are you going to pay for that?”
His buddy replied, “Oh, you missed out on Saturday, there was an orientation and there were a number of banks here. I signed up for a credit card that comes with $2,000.”
MacKay’s son was taken aback. He said, “You realize that that’s not free, you’ve got to pay that back… that’s $2,000 of debt that you can get into.”
It didn’t take long for his son’s buddy to return the jacket, and MacKay (who completed his MBA from SFU) was glad that he’d taught his son the difference between credit and debit. But, unfortunately, a lot of parents don’t take the time to teach their kids to be financially literate from an early age.
In August 2020, Hero Group decided to launch Hero Financials, an alternative banking solution for young Canadian consumers, particularly in the 12-21 age group. The solution comes with a prepaid Mastercard called SideKick, accessible through an app that has budgeting and savings measures in place, and can be used both in-store and online.
“So we have this hero-sidekick relationship, the hero being the parents, the sidekick being the child (or the cardholder within the account),” MacKay explains.
A sidekick can have multiple heroes, as the funding can come from different directions. The inspiration behind this product for young Canadians followed the success of Hero Group’s flagship product, the international SideKick Mastercard, which launched in 2018 for international students in Canada. It enabled funds to be moved offshore onto a Canadian prepaid reloadable credit card with a number of control features that the parents (or “heroes”) could put into play.
Hero Innovation Group. Hero Financials app
To help Canadian youth be more financially literate and independent, Hero Group tied the SideKick Mastercard to its local Hero Financials product. Through it, heroes can opt to receive notifications of their sidekick’s spending in real-time as well as put restrictions in place. Parents can allocate funds into specific categories (like “groceries” or “school supplies”), which can then be locked and unlocked. They can also block purchases altogether.
Hero Financials also comes with a savings account (called the Vault) and a Round-Up feature where purchases are rounded up to the nearest dollar and the change is deposited into the Vault.
With increased access to technology, spending habits have evolved to become somewhat of a “dopamine fix,” as MacKay puts it. “Throughout my childhood, if we were given a dollar (or, for my case, a pound because I’m from the UK), you had something, a physical and tangible currency in your hand… what we have now is, you make a purchase online. That transaction just happens in the background. It’s instant, but the payback isn’t.”
It makes sense—with the current generation being the least likely to be able to afford a house, who in their position wouldn’t want to fill that void with a little retail therapy?
But having crossed 1,000 users of the SideKick Mastercard, MacKay and the 24-person Hero team think they can help. “We are in the business of delivering innovative financial solutions for the next generation…and we also [offer] financial literacy support for their parents.”