Financial Education: Money Matters

There is a clear case for financial education efforts and this must imply a shared responsibility between all actors: private and public bodies, educational and financial institutions, NGOs, the academic sector, consumers and other stakeholders reflecting a joint commitment between them.

>> Financial education work by WSBI-ESBG members

Updated: January 2020

Why financial education is important

In the current socio-economic context, it is of utmost importance to foster entrepreneurship, numeracy skills and other skills related to financial matters. Doing so provides citizens, particularly the youth, with the necessary tools to succeed in economic life and society. Raising levels of financial literacy is one recommendable way forward when it comes to making societies more inclusive and boosting citizen empowerment, ultimately contributing to reaching the Sustainable Development Goals approved by the United Nations General Assembly. Financial Education particularly contributes to attain the objectives set by Goal 4, regarding qualitative education. In addition, financial education is instrumental to achieve greater levels of sound financial inclusion.

Identified issues in the field of financial education

People need to have the knowledge that will help them prevent falling into over-indebtedness. 21st century topics related to financial innovation and the trend towards digitalisation, particularly with the emergence of crypto-currencies and robo-advice, lead to growing consumer and investor protection concerns. Furthermore, there are nuanced topics that also require information to educate people, such as the existing information asymmetry between businesses and consumers, the increasing responsibility on households, and the need to understand what should be the role of finance in society and how citizens could have a drive in this.

Proposed solutions and actions

More leadership is needed from policy makers in Europe. Although education remains a competence of the Member States, the European Parliament could play an especially promoting role of financial education by, for example providing fora for policy discussions with stakeholders and exchange of excellent practices on matters such as the need for more financial literacy of the population in general, particularly in respect of the digital megatrend, changing labour markets and skills needs. More precisely, the European Parliament could advocate that the European Commission adopts more leadership in the promotion of financial education by, for example, organising and coordinating a European Financial Education day, where all interested stakeholders would be encouraged to participate. WSBI-ESBG, together with its members, organises workshops on financial education, often within the framework of the World Savings Day. Initiated by WSBI and celebrated at the end of October, the World Savings Day is an annual campaign started in 1924 that aims to make all citizens aware of the benefits of saving money. After almost one century, the initiative is more alive than ever, with events being organised in dozens of countries around the world.

In the spotlight

ESBG financial education brochure

Focus on good practice from ESBG members, addressing how financial education can act as a powerful tool in the fight against over-indebtedness. A lack of education – particularly financial education – can be the cause in some cases of some of the problems affecting part of the financial system, namely over-indebtedness, lack of diversification, fraud and abuse. An increased level of financial literacy can mitigate those, particularly over-indebtedness. Increased levels of financial literacy, complementing adequate consumer protection regulation, can lead to fairer and more inclusive societies. >> Read the brochure