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  • Recent international events have brought home that even previously secure forms of financial products such as deposit accounts carry some risk. People have been very concerned.
  • In the current climate we believe that our system of regulation in Ireland has the necessary elements to support our goals and to place consumers at the heart of regulation. Our goal is to help-consumers make informed decisions in a safe and fair market. It is no accident that we do not place the responsibility for creating this safety and fairness on consumers.
  • MABS is a government funded service that offers debt advice and advocacy to those in serious difficulties with lenders.
  • Key features plain English, relevant and not preaching! materials appealing and readable – test on your audience.
  • This website is a key communications resource for consumers. We have had over half a million visits in in the past year. We were able to up-date very quickly new information about increases in the deposit guarantee scheme.
  • No-one would have been interested in this a couple of years ago – now a popular section on
  • We believe that it is very important to involve other stakeholders as the responsibility for and interest in educating the public about financial services is shared. TY pack cards
  • Re the framework - as far as we are aware this is the first such framework to be developed to this level
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    1. 1. Presenter: Mary O’Dea Consumer Director Financial Regulator (Ireland) Ireland’s approach to financial education IADI conference – Washington, October 2008
    2. 2. Now more than ever… <ul><li>Recent events in international markets have focussed everyone’s minds on money </li></ul><ul><li>It is clear that much of the language being used is confusing (even for those using it) and scary for consumers </li></ul><ul><ul><li>Liquidity, capital, toxic debt, sub-prime write-downs, bail-outs, inter-bank loans etc. </li></ul></ul><ul><li>Most consumers have a limited understanding of how these markets operate and an even more limited understanding of how things could impact on them. </li></ul><ul><li>It is against this back-drop that we are talking here today about confidence in the financial system </li></ul><ul><li>Clearly we cannot expect consumers to have confidence in the financial system if commentators are publicly questioning confidence? </li></ul>
    3. 3. Is financial education important? <ul><li>We think so – individuals have had to take on more risks but it is not clear whether they understand these risks or what they can do to mitigate them </li></ul><ul><li>Some level of financial capability is necessary for full participation in society </li></ul><ul><li>Initial results from our financial capability study shows a correlation between financial capability and: </li></ul><ul><ul><li>financial product ownership – with a bank account a key product </li></ul></ul><ul><ul><li>income; and </li></ul></ul><ul><ul><li>housing tenure </li></ul></ul><ul><li>Financial exclusion can have negative consequences for individuals and can both exacerbate and embed social exclusion </li></ul>
    4. 4. Financial education and what it means <ul><li>Borrowing from the OECD definition: </li></ul><ul><ul><li>a process by which consumers improve their understanding of financial issues and </li></ul></ul><ul><ul><li>through information, instruction and objective advice, </li></ul></ul><ul><ul><li>develop the skills and confidence to become more aware of financial risks and opportunities. </li></ul></ul><ul><ul><li>Consumers can then make informed choices, know where to go for help, and to take other effective actions to improve their financial well-being.’ </li></ul></ul>
    5. 5. Financial education and what it means <ul><li>But remember that: </li></ul><ul><ul><li>for adults education is a choice; </li></ul></ul><ul><ul><li>providing education directly is expensive and resource intensive </li></ul></ul><ul><ul><li>most regulators do not have a competence in education – other stakeholders must be involved; and </li></ul></ul><ul><ul><li>it is vital that the importance of financial education is fully appreciated by the education sector </li></ul></ul><ul><ul><li>consumer education is not a magic formula – it will not necessarily create confidence in the financial system by itself </li></ul></ul>
    6. 6. Financial education in a wider consumer protection framework. <ul><li>We will need to consider the balance of our structure and depth of supervision for the future </li></ul>Consumer Protection Prudential supervision for a safe market Conduct of business for a fair market Informed consumers for informed decisions
    7. 7. What is the Financial Regulator (Ireland) doing in the area of financial education? <ul><li>Statutory role in ‘raising awareness among consumers of the costs, risks and benefits of financial products and services’. </li></ul><ul><li>National Steering Group on Financial Education comprising key stakeholders in the area of financial education. </li></ul><ul><li>Money Advice and Budgeting Service –MABS </li></ul><ul><li>These three strands make broadly meet the elements of the OECD definition of information, instruction and generic advice </li></ul><ul><li>Financial Capability Research Study </li></ul><ul><li>As is the experience internationally – school curricula are crowded and part of our role with our stakeholders is to raise awareness among policy makers of the need for enhanced financial education </li></ul>
    8. 8. Information - raising awareness of the costs, risks and benefits of financial products <ul><li>The Financial Regulator has a personal finance information service for consumers comprising: </li></ul><ul><ul><li>Suite of publications on financial products </li></ul></ul><ul><ul><ul><li>Guides on mortgages, savings and investments, personal loans, pensions and insurance. </li></ul></ul></ul><ul><ul><li>Contact points for information and help </li></ul></ul><ul><ul><ul><li>For consumers to contact us and ask questions or seek guidance, we have a personal finance telephone help-line and an Information Centre in Dublin city centre. </li></ul></ul></ul><ul><ul><li>Personal finance website for consumers </li></ul></ul><ul><ul><ul><li>Features include, generic information on a range financial products, cost comparisons, tools such as a budget planner and loan / mortgage calculators. </li></ul></ul></ul><ul><ul><ul><li>Dynamic information as people want it (especially in recent months!) </li></ul></ul></ul>
    9. 9. Using as a key channel
    10. 10. Getting the word out <ul><li>Social marketing </li></ul><ul><ul><li>We use traditional marketing techniques to communicate with consumers. As we do not sell anything this can be called ‘social marketing’ </li></ul></ul><ul><ul><li>As with traditional marketing if you do not give people what they need – they will not be interested </li></ul></ul><ul><ul><ul><li>We analyse what people need </li></ul></ul></ul><ul><ul><ul><li>We design solutions to meet these needs </li></ul></ul></ul><ul><ul><ul><li>We let people know what we have and how they will benefit </li></ul></ul></ul><ul><ul><li>We use traditional marketing channels such as mass media (TV and radio advertising) PR, and on-line / viral marketing </li></ul></ul><ul><ul><ul><li>Objective is to get a message across </li></ul></ul></ul><ul><ul><ul><li>Message must be relevant and useful – if you want people to engage – credit crunch / jargon buster </li></ul></ul></ul>
    11. 11. Credit Crunch – Jargon Buster <ul><li>What is the ‘credit crunch’? </li></ul><ul><li>Credit crunch is a general term used to describe a situation where bank credit is less available than before and/or credit becomes more expensive. This applies to credit between banks and from banks to their customers. </li></ul><ul><li>What does ‘liquidity’ mean? </li></ul><ul><li>The term ‘liquidity’ refers to how easily an investment can be turned into cash. For you, your most liquid investment is probably your current account because you have almost immediate access to your cash. An example of a less liquid asset would be your car because it takes time to sell your car and turn it into cash. If you needed to sell your car to raise money quickly, you would be under pressure and might not get the best possible price for your car. </li></ul><ul><li>What is solvency? </li></ul><ul><li>A bank is considered solvent when the value of its assets is greater than the value of its liabilities. Part of our job as the Financial Regulator is to set and closely monitor rules for banks so that their assets are enough to cover their liabilities with some room to spare. </li></ul>
    12. 12. Instruction – supporting and advocating for the teaching of personal finance <ul><li>We have produced (in partnership with MABS) a teaching resource for 16-17 year olds called ‘Get smart with your money’ and have this year participated in the training of teachers and on classroom visits. </li></ul>
    13. 13. Generic advice <ul><li>We offer generic advice in a one-to-one setting – on the phone, face-to-face and in writing </li></ul><ul><li>Our objective is to give people the right information on which they can act and make informed decisions </li></ul><ul><li>We offer information seminars to employers and community groups on personal finance issues </li></ul><ul><li>We attend public events and shows where we talk to consumers about their personal finance issues and offer out publications </li></ul><ul><li>This does not constitute product recommendations but might include:- </li></ul><ul><ul><li>Dos and don’ts </li></ul></ul><ul><ul><li>Questions to ask </li></ul></ul><ul><ul><li>Plain English explanation of financial terms and concepts; and </li></ul></ul><ul><ul><li>Support and guidance on how to complain. </li></ul></ul>
    14. 14. Stakeholder co-ordination <ul><li>The Financial Regulator (Ireland) established and chairs a National Steering Group for Financial Education comprising key stakeholders from; </li></ul><ul><ul><li>Government; </li></ul></ul><ul><ul><li>the financial services industry; </li></ul></ul><ul><ul><li>voluntary/not for profit groups; and </li></ul></ul><ul><ul><li>the education sector. </li></ul></ul><ul><li>The aim of the Group is to direct and co-ordinate financial education based on best international practice </li></ul><ul><li>The Group is due to produce a report by the end of the year. The report will be based on the output from a number of working groups </li></ul><ul><li>The focus of the group is expected to be on the development of standards for financial education </li></ul>
    15. 15. National Steering Group for Financial Education <ul><li>One key innovation will be a new financial competency framework which lists all the learning outcomes (over 420) needed for a person to become financially capable </li></ul><ul><ul><li>The learning outcomes are divided into 4 levels corresponding with the levels in Ireland’s national framework for qualifications </li></ul></ul><ul><ul><li>The framework is intended as a tool to assist those developing financial education resources and to allow for the development of standards and awards in formal education </li></ul></ul><ul><ul><li>The framework contains learning outcomes that relate to basic economic principles </li></ul></ul>
    16. 16. Sample extract from competency framework – focus on credit levels leading to specific learning outcomes Broad learning outcomes Areas of learning Prioritise needs over wants Explain life events that lead to the need for planning Prepare for a loss in income Anticipate and plan for growing expenditure Understand that options for dealing with debt problems Access information provided by firms and other sources Compare costs and benefits Compare how different forms of credit affect the ownership of assets Understand the basic types of borrowing Manage an appropriate level of debt Plan to absorb rising interest rates Understand the consequences of defaulting Analyse their own financial needs and wants Plan for changes in their personal circumstances Critically evaluate and compare information Budget for daily spending Social and personal issues about finance Coping with problems and the unexpected Researching and evaluating information and advice Foundation knowledge, skills and concepts
    17. 17. And finally…..(TV ad)
    18. 18. Thank you