Commonwealth Bank announced it will close its in-school financial education programs and move its education resources online.
This comes after yesterday's decision from the New South Wales Government to discontinue school banking, joining the Victorian, ACT, and Queensland governments that have already banned school banking programs.
CBA's Group Executive Retail Banking Services, Angus Sullivan, said support for the program is 'strong' with more than 1,450 schools around the country running Dollarmites.
"We are disappointed with the position taken by the Australian Securities and Investments Commission (ASIC) and subsequent decisions by some state and territory governments to take that choice away from individual schools and parents," Mr Sullivan said.
"Because of the ASIC review and these government decisions, we are unable to continue providing programs in schools and we have had to make a difficult decision to close our school banking program nationally."
Last December, ASIC conducted a review of school banking programs which revealed that despite claiming to help children develop long-term savings habits, providers were unable to demonstrate programs improve savings behaviour.
This review also found that young children are "vulnerable consumers" being exposed to "sophisticated advertising and marketing tactics" by school banking program providers, and that these providers "fail" to effectively disclose that these programs are aimed at customer acquisition.
CBA's in-school program will officially close at the end of the current school year, but all education resources are available in its new 'CommBank Youth Hub' for children to 'continue developing their financial capability'.
Abigail Boyd, NSW Greens MP said schools shouldn't be a "playground for the big banks".
"It's outrageous that they have been allowed this access to our children for so long, locking in as many young customers as they can," Ms Boyd said.
"ASIC’s scathing report proved beyond a shadow of a doubt that programs like Dollarmites are neither altruistic nor educational, they are disingenuous schemes that exploit children as future sources of private banking revenue.
"Our schools and children will be better off without Dollarmites, and with real financial education in its place."
Ms Boyd said that well over a third of people stick with the bank they had their first bank account with, so school banking programs have been worth "billions to the banks that run them".
CommBank was not the only bank to have run a school banking program, however it dwarfed the next-biggest program, Bendigo Bank, in terms of participating schools by about 25 to one.
Image by Annie Spratt on Unsplash