International initiatives on financial education:

The OECD International Network on

Financial Education

Adele Atkinson, PhD

Policy Analyst

Financial Education and Consumer Protection Unit

Outline

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• The OECD’s role in guiding financial education policy

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• The OECD/INFE themes and outputs

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• Key messages relating to financial education in schools

Recognising the importance of financial education

Started in 2002

Purpose: to respond to the objective of policy makers and other stakeholders to improve levels of financial literacy

Serviced by 2 OECD committees

- The Committee on Financial Markets

- The Insurance and Private Pensions Committee

International Network on Financial Education (INFE) created in 2008 3 strands of work:

1. Data collection, research and international analytical framework

2. Internationally recognised standard setting objectives

3. International dissemination and co-operation

Undertaking research from the beginning

2005 – OECD issued the first international publication on financial education

2008 – First analysis on:

- Risk awareness and insurance education

- Private Pensions and saving for retirement

2008 onwards – reports on specific issues:

- Credit

- National pension awareness

- Annuities and FE

- Risk awareness on large-scale risks

- FE in schools

- Evaluation of FE programmes

Ongoing collaboration

• Continued R&D by expert INFE subgroups, including surveys of member countries to identify good practices and policy gaps

• Biannual INFE meetings and expert subgroup meetings; plus international and regional conferences:

Madrid: May 2012

Cebu, Philippines: September 2012

Cartagena, Colombia: October 2012

See our website for more info www.financial-education.org

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INFE themes

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Dedicated programmes on

financial education and:

•National strategies

•Financial inclusion

•Women

•Investors

International methodologies on:

•Measuring financial literacy of:

Adults

15 year olds (PISA)

•Evaluation

Studies and research into

financial education and:

•Credit

•Saving and investment

•Pensions issues

•Behavioural economics

•Social marketing and

communication strategies

•Financial consumer

protection

Where are we now?

• International leadership

• G8 and G20 mandates and endorsements: e.g. Seoul 2010; Paris 2011; Los Cabos 2012

• Global clearinghouse (IGFE) sharing resources, data, good practice guidelines

• INFE experts from almost 100 countries

• Expert subgroups addressing a range of issues and sharing findings at regular meetings

• Secure, members-only online discussion portal

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4 sets of recommendations already endorsed

Principles and Good Practices on Financial Education and Awareness (endorsed by OECD Council in 2005)

Good Practices for Financial Education Relating to Private Pensions (endorsed by OECD Council in 2008)

Good Practices for Enhanced Risk Awareness and Education on Insurance Issues (endorsed by OECD Council in 2008)

Good Practices on Financial Education and Awareness Relating to Credit (endorsed by OECD Council in 2009)

Recommendation on Guidelines for Financial Education in Schools (forthcoming).

Additional; high-level Principles

G20 (2011), High-level Principles on Financial Consumer Protection

OECD/INFE (2011), High-level Principles for the Evaluation of Financial Education Programmes

OECD/INFE (2012) High-level Principles on National Strategies for Financial Education

Example of key outputs. 1) evaluation

Fact-finding stock take of programme evaluation amongst INFE members (2009) (30 countries-50 programmes)

Comparative and analytical framework for evaluation of financial education (2010)

OECD/INFE high-level principles on evaluation of financial education programmes (2011)

OECD/INFE Guides to Evaluation (2011)

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Example of key outputs. 2) measurement

Framework for the Development of Financial Literacy Baseline Surveys: A First International Comparative Analysis, OECD Working Papers on Finance, Insurance and Private Pensions, No. 1, OECD Publishing.

Measuring Financial Literacy: Results of the OECD / International Network on Financial Education (INFE) Pilot Study OECD Working Papers on Finance, Insurance and Private Pensions, No. 15, OECD Publishing.

Questionnaire and Guidance Notes A questionnaire that includes guidance on how to undertake the survey and how to code the data for analysis. The whole of the questionnaire should be used to enable comparisons. It can be integrated into other surveys or used alone.

A set of supplementary questions A collection of additional questions that may be of relevance to financial education policy in particular countries. Any number of questions from this set can be used.

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1) Strategy for financial education Position financial education in schools within a broader National Strategy for Financial Education Identify a public leader to ensure sustainability Identify clear and realistic policy goals: Keep in mind that financial education can complement but not substitute regulation and consumer protection Earmark long-term and sustainable resources Assess the needs and gaps in financial literacy and prioritise accordingly Map existing programmes and identify gaps in provision Design evaluation alongside programmes

OECD/INFE suggestions for efficient financial education in

schools

OECD/INFE suggestions for more efficient financial

education in schools

Integrating financial education in school

It may be necessary to start informally with optional financial education

Ideally, the aim is to integrate financial education into the curriculum, across school years (and maybe across subjects)

Follow education principles to identify key competencies and set goals

Develop detailed but flexible learning frameworks

Keep teachers and other stakeholders involved

Be careful to manage potential/perceived conflicts of interest

Examples

• NZ: Cross curricula ‘social-inquiry’ approach, used to link subjects such as social sciences, maths, English and health.

• NI: Statutory for 4-14 year olds. Starts mostly in maths, later branching into home economics and economic awareness.

• UK: pfeg quality mark to

manage potential conflicts

of interest.

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OECD/INFE suggestions for more efficient financial

education in schools

Preparing the teachers and materials

Fully train the teachers and other providers

Remember those already in service as well as trainees

Develop teachers confidence in their own financial literacy before providing them with pedagogical training and materials for the classroom

(remember that even the trainers may need training – are teacher training colleges prepared to teach financial literacy?)

Assess existing materials and tools, and identify gaps: develop criteria for assessing and indicating the quality of materials

OECD/INFE suggestions for more efficient financial

education in schools

Creating incentives

Find ‘champions’ to describe the benefits of financial education in the classroom

Develop ways of recognising achievement of pupils, teachers, schools and the community (exams, performance awards, prizes etc)

Consider extra-curricular events

Exchange good practices with others

Monitor and evaluate provision to provide positive feedback and guidance

Financial education limitations

Recognise the limits of financial education

FE is no panacea and is a long-term process

FE has limits: links between financial knowledge and behaviours are not obvious

FE is a new policy priority: more robust evaluation on efficiency of various programmes and international measure and data on financial literacy are needed

Consumers are not rational :

Passive behaviours even if they are properly informed

Numerous psychological/behavioural biases

Solutions to counter these limits at least on the short term (default mechanisms) should be considered where necessary

Appropriate regulation to prevent notably fraud & bankruptcies and offer easy redress and improve the quality of financial information and transparency

Thank you!

Comments and questions are welcome

adele.atkinson@oecd.org

www.financial-education.org

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