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Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea
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Kusumaningtuti Soetiono - 2014 Symposium on Financial Education in Korea

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This presentation by Kusumaningtuti Soetiono was made at the High-level Global Symposium on Financial Education: Promoting Long-term Savings and Investments in Korea which explored policies and good …

This presentation by Kusumaningtuti Soetiono was made at the High-level Global Symposium on Financial Education: Promoting Long-term Savings and Investments in Korea which explored policies and good practices for supporting long-term savings and investments through financial education and financial consumer protection. Find out more at http://www.oecd.org/daf/fin/financial-education/globalsymposiumonfinancialeducationforlong-termsavingsandinvestments.htm

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  • 1. Mrs. Kusumaningtuti S. Soetiono Member of Board Commissioners in Financial Education and Consumer Protection, IFSA Seoul, 26 February 20143/13/2014 Seoul, 26 Februari 2014
  • 2. 2 Presentation Index Challenges4 The Importance of Financial Education1 To Promote Long Term Savings3 Development of National Strategies2 2
  • 3. 3 Increased Life Expectancy at Birth Problems in Pension Programs Supports Financial Stability Low level of Financial Education Their coverage of a wider range of the population THE IMPORTANCE OF FINANCIAL EDUCATION TO PROMOTE LONG TERM SAVINGS AND INVESTMENT Low level of Financial Inclusion 21 3 64 5
  • 4. 4 Development of National Strategies Article 28 Law No. 21 Year 2011 OJK is authorized in providing information and educating the public on the characteristics of financial services sector, services, and products Mandate on Law No. 21 Year 2011  Launched by the President on the Nov,19 2013  Guidelines for financial authorithy, financial institutions and other stakeholders National Strategy on Financial Literacy
  • 5. 5 VISIONPILLARTARGETPRINCIPLE Support the realization of well literate society and increase the use of financial products to improve the welfare of the community. Development of National Strategies Well Literate Society  Professional  Employee  MSMEs  Housewives  Students  Pensioners Collaboration w/ Stakeholders
  • 6. 6 Mandate on OJK Regulation No. 1/2013 Financial Institutions must conduct education in order to improve the consumers and/or community financial literacy. Education programs must be prepared annually and reported to the Indonesia Financial Services Authority Development of National Strategies Refer to National Strategy on Financial Literacy
  • 7. 7 Financial Education to Promote Long Term Savings and Invesments Financial education to promote long term savings and investment is NOT for Elderly It is important for individuals to take proactive role in saving for retirement
  • 8. 8 Financial Education to Promote Long Term Savings and Invesments Content Assessment Programs Delivery Channel Regulation No such thing as a “one size fits all” financial education programme  Invesment Profile  Income  Other Based On Programmes should create creative method to deliver material due to difference in level of education of target audiences.  Reach all groups, esp. vulnerable group  People know where to go for help Consumer Protection also important for consumer well-being, because Financial Education may come too late 7% 2% Pension Fund Literate Usage 5Principle Baseline Financial Literacy Survey 2013
  • 9. 9 Dukungan Reasuransi Retensi Sendiri Develop strong infrastructure among institutions Challenges Enhance the Coordination among related institutions to have a structured and continuous program Assessment of the effectiveness of financial education programmes and an evaluation of what approaches have worked well Sustainability of financial education Programme
  • 10. THANK YOU Mrs. Kusumaningtuti S. Soetiono Member of Board Commissioners in Financial Education and Consumer Protection, IFSA Telp : +62-21 2981-7002 Fax : +62-21 350 1886 Mobile : +62-811-922-942 Email : kusumaningtuti.soetiono@ojk.go.id
  • 11. ATTACHMENT
  • 12. 12 The Importance (1) Their Coverage of a wider range of the population Source : World Economic Forum, 2011 Increased Life Expectancy at Birth
  • 13. 13 The Importance (2) Low Replacement Rates Changes in Pension Arrangement Number of Private Plans Source : OECD, 2011 Share of Labor Force and Population Aged 15–64 Covered by Pension Systems, 2007 Source : ADB, 2012
  • 14. 14 The Importance (3) Low Level of Financial Inclusion Respondent Without Loan and Savings in IndonesiaLow Level of Financial Literacy Source : World Bank, 2010 % Age
  • 15. 15 The Importance (4) As building blocks of the economy, the financial health of each household contributes to the financial health of the country as a whole Financially Secure Households are the BACKBONE of a Strong Domestic Economy. Relationship between Household Financial Stability and the Stability of the National Economy Financially educated customers are more likely to have long term savings which will have positive effects on economic growth
  • 16. 16 Pillar 2 Strengthening the Infrastucture Development of National Strategies  Increase the awareness, knowledge and skills about financial products and services  Changing the mindset and behavior of financial activities  Increase the usage of financial products and services  Strengthen and support the education and national campaign  Expand and facilitate access to financial information  Ensure the sustainability of financial literacy program Pillar 2 Strengthening the Infrastucture  Encourage Financial Institutions to develop products and services that best suit the needs of the community  Encourage Financial Institutions to improve the quality of services  Encourage Financial Institutions to expand the financial services area. Pillar 3 Development of Financial Products and Services
  • 17. 17 Market Capitalization (Billion US$) Total Outstanding (Billion US$) Long Term Savings and Invesments Goverment Bond, Corporate Bond, Sukuk, Asset Back Security GDP 2013: USD 908,4 Billion* 1 US$ = RP10,000
  • 18. 18 Financial Education to Promote Long Term Savings and Invesments (1) Content No such thing as a “one size fits all” financial education programme BASED ON .....  Risk Tolerance  Return Needs  Time Horizon Investment Profile  High Income  Middle Income  Low Income Their Income  Age  Gender  Culture Other Characteristics  Financial Products and Services, Entrepreneurship and Consumer Protection  Financial Planning and Budget Discipline
  • 19. 19 Financial Education to Promote Long Term Savings and Invesments (2) Delivery Channel Programmes should create creative method to deliver material due to difference in level of education of target audiences.  Education Website  Social Media  Lecture Urban People  Financial Literacy Car  Adv: TV, Radio, Newsletter Rural People Financial Customer Care System where customers can receive and give information, and filed a Complaints
  • 20. 20 Financial Education to Promote Long Term Savings and Invesments (3) Assessment Programs Baseline Financial Literacy Survey 2013 Financial Literacy Survey conducted in 2013 was the largest literacy survey yet, comprising :  20 Provinces (from Aceh to Jayapura)  8.000 Respondent 7% 2% Pension Fund Literate Usage Questionnaires Every Programs
  • 21. 21 Financial Education to Promote Long Term Savings and Invesments (4) Regulation  Consumer Protection also important for consumer well-being  Because Financial Education may come too late 5Principle Transparency Reliability Data Privacy Protection 5 1 3 4 Complaint Handling and Dispute Resolution Fair Treatment2 HOWEVER ... OJK Regulation No.1/2013 regarding Consumer Protection in Financial Services Sector
  • 22. 22 Dukungan Reasuransi Retensi Sendiri Develop strong infrastructure among institutions  Gain Endorsement  Regulatory Framework  Sense of Ownership  Commitment Challenges (1)
  • 23. 23 Enhance the Coordination among related institutions to have a structured and continuous program  Ministry/Govt. Inst.  University  Financial Institution and Association  Press  NGO Dukungan Reasuransi Retensi Sendiri KEY CHALLENGES Challenges (2)
  • 24. 24 Dukungan Reasuransi Retensi Sendiri KEY CHALLENGES Assessment of the effectiveness of financial education programmes and an evaluation of what approaches have worked well Challenges (3)  Questionnaire  Financial Institution and other data  National Survey
  • 25. 25  Financial Literacy Board  Financial Literacy Unit  Sustainability Improvement Dukungan Reasuransi Retensi Sendiri KEY CHALLENGESSustainability of financial education Programme Challenges (4)
  • 26. 26 Looking Back the Survey Literacy and Usage Level
  • 27. 27 Looking Back the Survey Employment  Compare to other type of employment, housewives and informal workers demonstred the lowest literacy level.  Only 13% housewives are well literate while only 16% informal workers are well literate in banking sector.
  • 28. 28 Looking Back the Survey  About 46% people with total expenditure more than US$175/mth are well literate in banking sector and only 19% are well literate in capital market.  People with higher expenditure level has higher literacy index in all sector. Expenditure Level A : > US$ 175 B : > US$ 125 - US$ 175 C : > US$ 60 - US$ 125 D : > US$ 40 - US$ 60 E : < US$ 40 Expenditure per Capita per Month * 1USD = Rp10.000
  • 29. 29  More than 50% people graduated from universities are well literate in banking and insurance sector and 20 % are well literate in capital market.  In contrast, only 1% people with no education are well literate in all sector.  People with higher education level has higher literacy index in all sector. Education Level Looking Back the Survey
  • 30. 30  Only 19% women have knowledge, skill and behaviour compared to 25% men are well literate in banking sector  In all 6 sector, women are less literate compare to men. Gender Looking Back the Survey
  • 31. 31  Only 17% people above 50 years old are well literate in banking sector and only 7% are well literate in pension fund.  Young and elderly people has difficulties in financial matters or lower literacy index in all sector. Age Looking Back the Survey
  • 32. 32  Only 17% people living in rural area are well literate in banking sector and only 1% are well literate in capital market.  People living in urban area has higher literacy index in all sector. Region Looking Back the Survey

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