1. DEVELOPING NATIONAL STRATEGIES FOR FINANCIAL EDUCATION: OECD/INFE HIGH LEVEL PRINCIPLES ______________________________________________
OECD/WB/RBI CONFERENCE ON FINANCIAL EDUCATION THE RUSSIA/WORLD BANK/OECD FINANCIAL LITERACY AND EDUCATION TRUST FUND, 4-5 MARCH 2013, NEW DELHI
Flore-Anne Messy
Senior Policy Expert Executive Secretary of the International Network on Financial Education
OECD Financial Affairs Division

2. OUTLINE 1
Global context : Importance of financial education and OECD/INFE contribution 2
Rationale, definition and international framework for National Strategies on Financial Literacy 3
OECD/INFE high level principles : International experiences 4
Guidance for the implementation phase

3. Increasing transfer of risks to individuals
1. Empowering financial consumers : a necessity in an evolving societal & financial context
A riskier, broader, complex and innovative financial landscape
Limits of financial consumer protection and regulation
Low level of financial literacy
Asymmetry of information, knowledge and power
Lack of trust in financial markets and providers
Fraud, abuses & misselling of products
Financial and social exclusion/ inadequate protection
Costs for governments, consumers and the industry
A caveat emptor financial retail market : related negative spill over effects
Increasing transfer of risks to individuals
More consumers have access or should have access to financial services
More complex sophisticated financial landscape
Prudential regulation and protection is not enough
Healthy competition amongst financial providers
Suitable financial innovation : providing incentives for their development and increasing use of relevant ones
Robust and growing financial markets
Financial inclusion : a demand-side complement to measures aimed at improving financial access
Effectiveness of financial market conduct or consumer protection regulation
Reduced welfare and corporate benefits and solidarities
Growing variety and frequency of risks
More and new consumers have access to financial services
More and diverse providers
More products; more complex products
New technologies and related risks
Gaps in FCP : Disclosure :
more is less : too complex disclosure which is not tested
Redress mechanism not always efficient
Lack of harmonisation of the financial sector : regulatory arbitrage
Negative consequences especially for vulnerable groups.

4. Low level of financial literacy/capability (OECD/INFE 2012 survey and national surveys)
Attitude : confidence/trust, awareness and care
Only 10% of respondents provided correct answers to a series of very simple financial knowledge questions (source US 2009 survey)
At the same time, 37% self-assessed their financial knowledge as very high
Knowledge of financial concepts and understanding of products
A majority has difficulties in planning ahead and for retirement
Households’ overindebtedness is increasing in most countries
Skills and long–term planning
young and elderly people, women, low income groups are more vulnerable
Groups at risks

5. Financial consumer empowerment trilogy : Global recognition
Financial Education
Financial Consumer Protection
Financial Inclusion
OECD/INFE High-Level Principles on National Strategies for Financial Education
G20 (2011) High-Level Principles on Financial Consumer Protection developed by the OECD
G20 (2010) Principles for Innovative Financial Inclusion

6. Financial Education (FE) : A Capacity building 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”.
Outcome: improved financial literacy/capability
OECD 2005 definition

7. OECD/INFE contribution to Financial Education
Work started in 2002! serviced by 2 OECD Committees
Three areas of work
1- Data collection, analytical work & research
2- Policy instruments & implementation methodology
3- Global and regional policy dialogue & co-operation
7 set of policy instruments and a body of research
International Network on Financial Education countries, 260 public institutions
International Gateway for financial education

8. Projects developed thanks to the Russian Trust Fund
OECD/International Network on Financial Education (INFE) Priority areas of work
Data and methodologies
Measurement of financial literacy
Adult (14 countries)
Young population PISA (18 countries)
Evaluation of programmes
Key projects
National strategies
Youth & School
Financial inclusion
Women
Selected issues
Credit
Saving & investment
Pensions & Insurance
Behavioral economics
Social marketing and communication strategies
Projects developed thanks to the Russian Trust Fund

9. 2. National Strategy for Financial Education (NS) Definition
No one size fits all model! NS =A nationally coordinated approach to financial education that consists of an adapted framework or programme which :
Recognises the importance of financial education and defines its meaning and scope at national level in function of 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”

10. 2. National strategies for financial education Relevance
Articulated and tailored approach
Avoid duplication of resources
Identify relevant stakeholders
Reinforce co-operation and trust
Identify and promote efficient practices
Promote financial literacy as a life skill
Identify and address policy or particular groups needs

11. 3. Selected findings of OECD/INFE survey : NS status
 3/4 of respondents
India, Indonesia, Singapore, Japan, Malaysia, Australia, New Zealand,
Hong Kong, Thailand (in the pipeline)
Around 40 countries have launched a NS process
Financial inclusion (and cash money transfer) and/or
Consumer protection measures/approaches
Often integrated in a wider approach for financially empowered individuals
Implemented : Australia, Brazil, Czech Republic, Ghana, India, Ireland, Malaysia, Netherlands, Portugal, Slovenia, Spain, United Kingdom, United States
Designed : Canada, Colombia, Estonia, Indonesia, Kenya, Latvia, Lebanon, Malawi, Mexico, Peru, Pland, Romania, Serbia, South Africa, Sweden, Tanzania, Turkey, Uganda, Zambia Russia, Thailand

12. National Strategy for Financial Education Framework
Role of stakeholers
Governance and
Roadmap and
main priorities
Implementation directions and evaluation
Preparatory and diagnosis phase

13. The foundation : preparatory step or diagnosis phase
Mapping of existing resources and stakeholders
Avoid duplication of resources
Identify successful practices
Baseline survey of the level of financial literacy
Target groups/ needs and gaps
Main policy issues
Consultation process amongst key stakeholders
Start elaborating coordination mechanisms
Build trust and consensus
National awareness and communication
Raise awareness
Attract relevant stakeholders
Baseline surveys in Korea, malaysia , Japan, ( using OECD tool) singapore, Australia , NZ ( 2 already developed)

14. Benefits of the preparatory phase
Next steps of the NS :
Governance and role of stakeholder
Roadmap and key priorities
implementation
Initiated coordination
Increased trust amongst stakeholder
Agreement on joint priorities based on evidence!

15. Coordination mechanisms
1st Building pillar :Governance mechanisms and role of main stakeholders
An already existing institution (often the Central bank/Ministry of finance)
A coordinating body/council involving various public stakeholders and operating arrangements
A new body with a dedicated mandate (UK, New Zealand)
A person (Canada)
Clear leadership (mandate on financial education)
Flexible and evolving overtime
Defining stakeholders’ roles and responsibilities
Coordination mechanisms

16. 1st Building pillar (cont.) : the Role of main stakeholders
Public authorities
Lead and establish the framework
Set main priorities
Design quality standards
Private players
social responsibility ≠ conflict of interest
Self regulatory bodies & PPP
Key civil stakeholders
Media; NGOs; trade unions, employers, consumer associations
International network &co-operation

17. 2nd Building pillar: Tailored roadmap
Measurable (need for a regular assessment!) and realistic
Consistent policy priorities (e.g. improve saving, reduce debt, increase financial inclusion)
Target : youth (school), women, elderly, vulnerable
Common objectives and priorities
Ideally dedicated and sustainable budget at least per project
Mixed public–private resources
Resources

18. 3rd Building pillar – implementation : Flexible directions
Define quality standards for providers
Grant awards or certify programmes’ quality
Support evaluation of programmes
Delivery methods and evaluation
Changing behaviors requires a balanced combination of regulation and quality education

19. Flore-anne.messy@oecd.org www.financial-education.org
THANK YOU!