|
|
Background
While the digitalisation of financial products and services may bring benefits, it also contributes to the complexity of retail finance, in particular among the most vulnerable. It also exposes individuals to new risks such as digital financial exclusion, online fraud or personal data hacks.
This raises policy concerns as recent international financial literacy surveys (OECD, 2020[2]) indicate that substantial sectors of the population across all economies surveyed do not possess adequate levels of basic financial knowledge and are ill prepared to make savvy financial decisions. Low levels of digital financial literacy can compound these weaknesses and have a negative impact on personal financial wellbeing, with potential repercussion on financial inclusion and stability.
Higher levels of digital financial literacy can equip individuals with the knowledge, skills and attitudes
needed to successfully navigate an increasingly digital retail financial market. Digital financial literacy can help individuals to benefit from innovative digital financial products and services while protecting
themselves from related risks such as digital financial exclusion, digital frauds and scams.
The need for an international measure for digital financial literacy
The OECD has developed internationally recognised instruments and encouraged the collection of
comparable data on financial literacy of adults, of owners of micro small and medium enterprises and of students. This provided insights into the needs of individuals and households and allowed policy makers and researchers to understand how equipped these are to benefit from developments in financial products and services and to protect themselves from risks to their financial well-being. The collection of financial literacy data and evidence continues to be a priority for the OECD and remains fundamental to the work of the OECD/INFE.
Over the years, the OECD/INFE has created important tools to measure the financial literacy and inclusion of adults (OECD, 2022[3]), MSMEs owners (OECD, 2020[4]) and students via the PISA assessment (OECD, 2019[5]) which have significantly improved the ability of countries to understand levels of financial literacy and inclusion, benchmark themselves and monitor progress. These survey instruments have been updated over the years to cover elements related to the use of digital financial services and other digital...
more at OECD