Fostering Research in Financial Literacy and Inclusion
The Sim Kee Boon Institute for Financial Economics (SKBI), in partnership with the Global Financial Literacy Excellence Centre (GFLEC), a world leading centre for financial literacy research and policy, organized a forum on financial education and literacy at the Singapore Management University on 16-17 September 2019.
The event was part of SKBI’s broader efforts to foster research in financial education and the dissemination of financial knowledge to the underserved and unserved.
The first day of the forum saw a gathering of about 20 academics from Singapore, United States, Australia, United Kingdom, Vietnam, The Netherlands and The Philippines to share their research on financial education. The topics presented and discussed included “The Power of a Financially Literate Woman”, “The Role of Fintech Development in Financial Inclusion in Asian Countries”, and “Financial Literacy and Suboptimal Financial Decisions among the Elderly”.
The day ended with the presentation of Financial Literacy Research Award in recognition of excellence in financial literacy research. There were two winners of the Award, namely Joelle Fong (National University of Singapore): “Financial Literacy & Suboptimal Financial Decisions among the Elderly”, and Dennis Philip (Durham University): “The Power of Financially Literate Woman”.
Professor Annamaria Lusardi, Director of the Italian Financial Education Committee and Academic Director of GFLEC started the second day’s programme with a keynote address where she shared her insights into her findings from several surveys.
Attended by about 40 academics, policymakers, personal investors and participants from banking and financial institutions as well as consulting companies, the audience learned that based on a survey of 15 countries from 2009 to 2018, the Nordic countries of Norway, Denmark and Sweden were ranked the highest in financial literacy, followed by USA and Italy. The survey also found that globally, women possessed less financial knowledge than men, which means they are ideally suited to benefit from financial literacy programmes.
Other surveys showed that it is not necessarily true that the most financially-developed markets have the most financially-literate population. In 2018, only half of those surveyed in USA have discussed about their retirement, with the women considerably less so. As for debts, those aged 18 felt they have too much debt, and 30% of those who are near retirement think they have too much debt.
Professor Annamaria opined that the level of financial literacy needs to be increased so that people can participate more meaningfully in the development of societies. To do so will require large and scalable programmes. Such programmes are needed in schools because the young generally have low level of financial knowledge, and they have to be made compulsory so that students can pick up these life skills at a young age.
The second keynote speaker was Mr Diwa C. Guinigundo, former Deputy Governor for the Monetary Stability Sector, Bangko Sentral ng Pilipinas, and an Advisory Board member of SKBI.
In his speech, Mr Diwa shared the initiatives undertaken by the Central Bank of Philippines in promoting financial literacy and inclusion in the country. “Financial inclusion can complement and reinforce our policy objectives of consumer protection, financial stability and integrity... We believe that facing the issue of poverty and illiteracy head-on by teaching people the value of money and savings, and multiplying whatever little resources they have by investing them and providing them with the means- online, mobile, fintech, blockchain – would accelerate the pace of uplifting people out of poverty.”
He pointed out that the positive correlation between financial inclusion, growth and employment are limited for those economies with under-developed institutions, and raised the question of whether there is a disconnect in the efforts to teach people to value money and invest while being entrepreneurial.
The day concluded with a panel discussion comprising Professor Annamaria Lusardi, Professor Michael Staten, Bart Cardon Associate Dean for Career and Academic Services from The University of Arizona, USA, and Professor William Walsted, John T. and Mable M. Hay Professor of Economics from University of Nebraska – Lincoln. Together with SKBI Director, Professor Dave Fernandez, this team plans to make the Asia-Pacific Financial Education Institute an annual event in Singapore.
“SKBI conducts applied research that is driven by industry and societal needs, and the issue of financial literacy and inclusion will remain a focal area for us. By partnering with Anna, Mike, and Bill, I think we have gotten off to a great start in advancing the global research agenda of this emerging field,” said Prof Dave Fernandez.
Featured photo: (L-R): Professor William B. Walstad, John T. and Mable M. Hay Professor of Economics, University of Nebraska – Lincoln; Professor Dave Fernandez, Director of Sim Kee Boon Institute for Financial Economics at Singapore Management University; Mr Diwa C. Guinigundo, former Deputy Governor for the Monetary Stability Sector, Bangko Sentral ng Pilipinas; Professor Annamaria Lusardi, Director of the Italian Financial Education Committee and Academic Director of Global Financial Literacy Excellence Centre; Professor Michael Staten, Bart Cardon Associate Dean for Career and Academic Services and Professor of Agricultural and Resource Economics, The University of Arizona.