International perspective
Transcrição
International perspective
FINANCIAL EDUCATION: AN INTERNATIONAL PERSPECTIVE Adele Atkinson, PhD Outline Background • National Strategies OECD work on Financial Education on Risk and Insurance Two Recent projects • Core Competencies for youth and adults • Digital financial services Summary BACKGROUND OECD International Network on Financial Education (OECD/INFE) OECD work on financial education started in 2002 • under the aegis of the OECD Committee on Financial Markets and the Insurance and Private Pensions Committee The International Network on Financial Education (INFE) was created in 2008: Brazil is on the Advisory Board • It includes over 200 institutions from 114 countries and economies. • It organises global and regional policy platforms and regular meetings to discuss the latest developments, share good practice… • … and develop analytical and comparative studies, methodologies, policy instruments and practical guidance on key priority areas related to financial education 4 Financial Education is… “… a process by which financial consumers/investors improve their understanding of financial products and concepts; and through information, instruction and/or objective advice develop the skills and confidence to become more aware of financial risks and opportunities to make informed choices, to know where to go for help, and take other effective actions to improve their financial well-being”. (OECD 2005) The intended outcome of education is improved financial literacy and well-being 5 Empowerment requires a multi-dimensional approach OECD/INFE (2012) High-Level Principles on National Strategies for Financial Education Financial Education Financial Inclusion G20 (2010) Principles for Innovative Financial Inclusion G20 (2011) High-Level Principles on Financial Consumer Protection developed by the OECD Financial Consumer Protection 6 NATIONAL STRATEGIES National Strategy for Financial Education What is it? No one-size-fits-all model! A National Strategy is a nationally coordinated approach to financial education that consists of an adapted framework which: Recognises the importance of financial education and defines its meaning and scope at national level in relation to identified national needs and gaps Involves the cooperation of different stakeholders as well as the identification of a national leader or coordinating body/council Establishes a roadmap to achieve specific and predetermined objectives within a set period of time; and, Provides guidance to be applied by individual programmes in order to efficiently and appropriately contribute to the strategy” 8 Steady development of national strategies Status of national strategies in 2015 Status of national strategies in 2012 This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area 9 Private sector involvement (OECD/INFE Guidelines for Private and not-for-profit stakeholders in financial education, 2014) Co-ordinating framework • In various countries, including Brazil, Czech Republic, Estonia, Ireland, Netherlands, private and not-for-profit stakeholders are involved in the development and implementation of the national strategy together with public authorities Supporting role, avoiding conflict of interest • Financial support for governmental strategies and initiatives (e.g. New Zealand) and levies (e.g. Ireland, UK), compulsion (e.g. South Africa, Indonesia) • Indirect involvement of financial institutions through industry associations: e.g. developing materials and providing trainers Meeting key criteria • Codes of conduct to monitor behaviour voluntarily or compulsory (e.g. Portugal) • Ensuring objectivity / impartiality; marketing free • Quality mark / certification (UK, US) 10 Some of the key criteria to contribute effectively to financial education Objectivity • Address consumer needs • Balanced, impartial unbiased education • No marketing activities Not linked to commercial priorities Quality of resources and trainers • Resources that are: • Tailored • Targeted • Appropriate • Accurate • Up to date • Accessible • Trainers should be competent and confident Monitoring and evaluation • Systematic, independent, evaluation is essential • Learning from previous success (and failure) saves time and money FINANCIAL EDUCATION ON RISK AND INSURANCE An opportunity to increase take-up? Insurance spending:GDP 2014 14 12 10 8 6 4 2 0 2,977 ) OECD (2016), Insurance spending (indicator). doi: 10.1787/adb73055-en (Accessed on 10 May 2016 I tend to live for today and let tomorrow take care of itself OECD/INFE survey 2015 Brazil total: all participating countries 27,1 25,5 22,4 21,0 29,1 24,4 14,9 14,9 10,0 9,9 1 Completely agree 2 3 Preliminary data based on responses from 24 countries: Brazilian data Source Central Bank of Brazil/Serasa Experian 4 5 Completely disagree I am prepared to risk some of my own money when saving or making an investment OECD/INFE survey 2015 Brazil 21,5 6,6 total: all participating countries 24,9 23,8 19,4 29,3 24,5 19,4 17,7 11,1 1 Completely agree 22 33 Preliminary data based on responses from 24 countries: Brazilian data Source Central Bank of Brazil/Serasa Experian 44 5 Completely disagree Selected OECD work on insurance, risk and financial education: needs and challenges Various reasons to focus on the needs of individuals: • Risk transfer, complex products and decisions, the role of intermediaries, burden on taxpayers from lack of insurance In 2011: schools / stakeholders were providing education on emergency disaster response, less on risk reduction or financial planning: suggesting a need for a more empowering approach Reasons for inappropriate coverage • Underestimating likely chance and cost of adverse events and extent of responsibility • Lack of trust in, and understanding of insurance; procrastination and passivity Selected OECD work on insurance, risk and financial education: targeted benefits Some groups are particularly vulnerable Financial education can help people to: • • • • Be aware it can be hard to shift the needle: • e.g. Women, elderly, sick/disabled, jobless, migrants, those with low literacy/language skills Recognise the need for insurance AND reduce risks Choose appropriate policies Make claims when relevant Understand the need for mandatory schemes • Japan promoted hazard insurance; take-up 33.5% in 2002 to 40.3% in 2006. • Istanbul earthquake insurance coverage shifted from 15% to 30% in 7 years. Selected OECD work on insurance, risk and financial education: suggestions Some key conclusions for financial education and inclusion: People need specific awareness: e.g. Other recommendations • Households need access to financial tools that are available locally, affordable and of sufficient quality. • Trust in providers is vital • Risk of earthquake/flood etc in local area • Specific risks when travelling • Knowledge of how insurance can help when things go wrong • Measure financial literacy and evaluate • Maximise the value of teachable moments • Ensure insurance is properly covered within national strategies and at school; involve all stakeholders CORE COMPETENCIES FOR YOUTH AND ADULTS Background 2013: G20 leaders called on INFE to develop frameworks for youth and adults. Core Competencies Framework on Financial Literacy for Youth was included in the Annex to the G20 Leader’s Communiqué Antalya, Turkey November 2015. Two proposals for an adult framework were discussed at the 2nd Meeting of the Expert Subgroup and the 4th Meeting of the INFE Technical Committee. Agreed to follow approach similar to that used for the youth framework, and requested that the Secretariat develop a draft Core Competencies Framework for comment through an iterative process and submission to the G20 in 2016. Intended purpose 1. Support the development and implementation of national strategies; guide the development of financial education initiatives 2. Describe the outcomes considered to be the most important components of financial literacy 3. Reflect all aspects of financial literacy (traditional and emerging) considered to be internationally relevant to financial well-being 4. Be a flexible tool that can be applied taking into account factors such as personal circumstances and decision making, and national priorities and levels of inclusion Identifying core competencies related to risk and insurance (1) Youth Identifying Risks • Aware that risks such as flood or ill-health may have financial consequences • Knows that late/ non-payment of bills or credit can have negative financial consequences. Financial Safety Nets and Insurance (knowledge) • Basic awareness of how saving products and insurance can help manage risk • General understanding of the reasons that people buy insurance products • Knows some common features of certain types of insurance such as travel insurance or car insurance [depending on national specificities]. • Understands the purpose of disclosing relevant information when applying for insurance. Identifying core competencies related to risk and insurance (2) Youth Financial Safety Nets and Insurance (skills and behaviour) • Able to describe the purpose of insurance policies • Can decide whether simple insurance products are relevant to them • Checks whether their household already has protection for a particular adverse event before insuring …. And more advanced knowledge, skills and behaviour: • Aware of the possibility and limitation of government financial safety nets • knows whether insurance is mandated • Makes an informed decision about the need for insurance when buying products or services or planning to travel • Considers carefully whether insurance represents good value for money Why focus on young people? Young people more likely to access digital financial products Parents do not always discuss money matters Financial products are complex Positive behaviours (and negative ones) are created in childhood Young people are given increased personal responsibility and freedom to shop! Today’s youth can expect increased longevity Many youth face unemployment or a lack of job security Identifying core competencies related to risk and insurance (3) Adults INFE Work-in-progress Identifying risks (underpinning competencies) • Aware of risks in a financial context, including those inherent in products and those that can be insured against • Aware that certain risks can be reduced through positive actions • Considers the risks of significant external issues that may impact on personal finance [including for example environmental, health-related, security or economic factors] • Motivated to identify own risk tolerance • Confident to make own assessment of risks [avoiding availability bias] Financial Safety Nets and Insurance (underpinning competencies) • Knows how to create a financial safety net such as rainy day savings • Can calculate how long it will take to build a safety net that could cover three month’s income • Motivated to create a financial safety net and purchase insurance against adverse events or outcomes with a financial consequence where relevant DIGITAL FINANCIAL SERVICES (DFS, OR FINTECH) Availability of DFS and main actors Pension Insurance Credit In 15 countries insurance is available through mobile banking Savings • Payments Insurance is available through internet banking in 21 INFE member countries International Transfers • Domestic Transfers Digital provision of insurance is widespread 40 30 20 10 0 Basic cash in/cash out within 36 INFE countries/economies Availability of DFS Internet Banking Mobile Banking Mobile Wallet Simple Mobile Money Instruments combining prepaid cards and mobile phones Potential benefits of DFS for insurance DFS offer opportunities for financial inclusion of disadvantaged groups IT and digital services make it easier to compare prices and services Technology can lower costs of provision, thus increasing inclusion Automation can prevent missed payments and ensure continued insurance cover Electronic data can be analysed easily [but this also brings its own risks e.g. profiling] Potential challenges More decisions will be made without human guidance • Strong requirement for good literacy and financial knowledge • Temptation to make quick decision • Need to know which features to compare Consumers and providers need to keep data secure • It is important to know how to recognise fraudulent offers/scams Buyers may not read and understand the terms and conditions before signing electronically and may not recognise that the contract is legally binding Using education to maximise the potential of DFS for insurance Make digital part of the solution: as with the Brazilian Citizen Financial Education Project Create tools to compare products and reminder to check policies Reach out to the most vulnerable to help them to understand the products available: e.g. Malaysia National e-payment roadshows Use technology to ensure that the terms and conditions are being read: e.g. Portugal Provide teaching resources to schools: e.g. UK pfeg Put educational resources online: e.g. Canadian Life and Health Insurance Association Summary Financial education is important; hence the growth in national strategies. OECD work shows that financial education for risk and insurance has multiple potential benefits; more evaluation would help to identify the most effective approaches. Recent work has identified core competencies on these topics, and… A new project on DFS continues to identify new challenges and potential solutions, many of which are relevant to the insurance industry. THANK YOU! [email protected] [email protected] www.oecd.org/finance/financial-education www.financial-education.org 32