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Financial Education: Quo Vadis?

Financial Education: Quo Vadis?

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​BRUSSELS, 29 May 2018 – Policymakers, regulators, researchers, representatives of consumers, not-for-profit institutions, international organisations, financial museums and members of WSBI-ESBG gathered on 22 May at the WSBI-ESBG premises in Brussels to discuss financial education. Debates focused on building a strong case for financial education by looking at how it can harness empowerment in areas such as entrepreneurship, sustainable finance and development, among others. It also looked at challenges and explored the research and experiences of measuring the impact of financial education programmes, as well as opportunities in terms of the complementarity of financial education to consumer and investor protection legislation.

The event began with an opening address by Chris De Noose, Managing Director of WSBI-ESBG. “At WSBI-ESBG we firmly believe that increasing the levels of financial literacy of the population can greatly contribute in achieving fairer and more inclusive societies. How? By fostering entrepreneurship, strengthening the link with financial inclusion, promoting gender equality, having more informed consumers, preparing the youth with the necessary tools to succeed in life but also contributing to the understanding of what the role of finance should be," said De Noose (read the full speech here).

The keynote speaker Silvia Singer, CEO of Interactive Museum of Economics in Mexico (MIDE), shed the light on importance of financial education programmes and initiatives and highlighted the role of finance museums in the broad universe of key actors. “Financial and economic literacy is essential. We need to spread the word and everybody deserves this education. I think it is a right and we need to put this in everyone's hands," started her speech Singer. She also stressed the important role that financial education plays in reaching the United Nations' Sustainable Development Goals, such as reducing poverty and inequality or fostering gender equality.

Linking financial education to individual empowerment

The first panel of the conference focused on financial education and its role in individual empowerment.  Caroline Jenner, CEO of Junior Achievement Europe, an organisation devoted to create more entrepreneurs, build work readiness skills and improve financial literacy, outlined the importance of financial education among young people. “A deep dive in finance and economics is an extremely important learning process. It teaches young audiences how financial literacy contributes to personal empowerment, in terms of employability, financial education and entrepreneurship," explained Jenner.

Eszter Salamon, Executive Director of Parents International, reminded that there are many actors that have a role to play in financial education. She suggested that the primary target audience should be parents as they are the role models to their children. In addition, financial institutions and banks could be more involved in empowering teachers.

Aleksandra Maczynska, Executive Director of Better Finance, added that educating investors is also highly important and that financial education should remain a complement to consumer protection legislation.

The importance of financial education in the context of microfinance services and programmes was also emphasized by Elwin Groenevelt, President of European Microfinance Network. “When you want to drive a car you need a licence. If you want to use financial products you first need financial education because of the risks," said Groenevelt.

Robin Edme, Senior Policy Officer Green and Sustainable Finance at the European Commission suggested that the public debate should move from financial education teaching techniques to financial empowerment in the context of sustainable finance.

Cédric Turini, Corporate Social Responsibility Director at National Federation of French Savings Banks provided an insight of the work carried out by their subsidiary Finances & Pedagogie, which every year trains 40 000 people in France on the topics of finances at all stages of life, both for young people and adults.

Measuring the impact: how?

The second panel addressed the challenges of measuring the impact of financial education programmes. Philip List, Director of FLiP (Erste Financial Life Park), which offers interactive museum experience to its visitors, gave insights of the immediate impact of a visit to their museum. “Research shows that 80 percent of our visitors leave with more financial knowledge than before coming. Are we satisfied? Yes, but this is only a short-term effect. We are aiming for a long lasting impact. This is only achievable if we get financial education into classrooms and families," elaborated List.

“We have a lot of data but we have to evaluate what this data is telling us. It is not just about numbers, it is also the behaviours that we have to evaluate" added Singer. According to Singer, financial education should evolve according to current trends, such as digitalisation, to ensure that evaluation tools are up-to-date.

Danièle Vander Espt, Director Financial Education at Belgian Financial Services and Markets Authority (FSMA) provided an example of their financial education programme Wikifin. Its website reaches more than 2 million visitors a year and according to Vander Espt, this is a clear evidence that people need information and advice to make financial decisions.

Kristof De Witte, Associate Professor at KU Leuven and Wikifin Research Chair on Financial Literacy, said that experiments that are run in schools by Wikifin help to evaluate which practices work and has impact. “How can we close the intergenerational gap in research? Creating course materials tailor-made for students, trying to involve parents and providing them course materials too, improving quality and knowledge of teachers," suggested De Witte.

Inevitable role of WSBI-ESBG members

The last panel of the conference examined how financial education complements consumer and investor protection legislation. “Financial education should be a complement. Financial crisis revealed that transparency is not enough. How can we proceed? By giving more responsibility to providers of financial services, we need to think of the consumers and give them additional tools to assist them in the decision-making process," opened the panel discussion Santiago Escudero, Retail Banking Expert at European Banking Authority.

Mónica Malo, Communications and External Relations Manager at CECA reminded the audience that financial education can provide support to consumers in the major financial decisions of their lives and that investor education is also needed.

The role of savings banks in financial education was addressed by Wolfgang Neumann, Director at the EU Representation of the German Savings Banks Association. “Financial education needs to work properly and educational systems do not educate people well about the economic situation they are living in. We can play a role there," said Neumann.

According to Jean-Paul Servais, Chairman at Belgian Financial Services and Markets Authority, there are three key aspects that can improve the current situation and make financial education national strategies successful: an ambitious leader (politician, institution, organisation or similar) who would engage people and would be fully dedicated to the topic, a collaboration between private and public stakeholders and a clear and short mission statement.

Carlos Trias Pinto, member of the European Economic and Social Committee, also suggested that involving stakeholders in a comprehensive way is important and more policy coherence is needed. “We need to better align and combine our efforts. Financial education should be the main tool to transfer a new approach of financial experimentation, assuring that all vulnerable people have access to new basic sustainable finance products."

The conference ended with closing remarks by Wilhelm Krätschmer, Chair of WSBI-ESBG Corporate Social Responsibility and Sustainable Development Committee. “We see that there is a clear case to continue our efforts in financial education and that there are many actors active in this endeavour, which reflects the multi-stakeholder spirit of financial education initiatives. Having said this, we need more inspiring leadership from policymakers in order to continue to promote increased levels of financial literacy of the population in Europe and worldwide," concluded the conference Krätschmer. ​​

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​Caroline Jenner​, CEO of Junior Achievement Europe; Silvia Singer, CEO of MIDE, Interactive Museum of Economics​ in Mexico​; Philip List, Director of Erste Financial Life Park (FLiP) and Silvia Kinne, Expert in Educational Media at Deutscher Sparkassenverlag discuss the importance of financial education​​

>>Read the High Level Messages of the conference​

>>Read full speech of Chris De Noose, Managing Director of WSBI-ESBG

>>More about the event and programme

>>Read more about the World Savings Day initiative

>>Read more about the European Stock Market Learning​​​




 

Financial education; Financial inclusion; Responsible Business