The document discusses the importance of financial education in promoting long term savings and investments. It notes several challenges, including low levels of financial literacy and inclusion in Indonesia. The document outlines Indonesia's national strategy for financial literacy, which includes pillars for developing a literate society, strengthening financial infrastructure, and developing financial products and services. It also discusses delivering financial education through various channels and assessing program effectiveness through surveys. Overall the document emphasizes the role of financial education in supporting individual and national economic stability.

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