Financial Education Strategies in Asia: Main Challenges and Goals Malaysian Experience

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1 OECD-Bank Indonesia Int l Conference on Financial Education Financial Education Strategies in Asia: Main Challenges and Goals Malaysian Experience Koid Swee Lian Director, Consumer and Market Conduct Department 21 October 2008 CENTRAL BANK OF MALAYSIA 1

2 Financial Sector Master Plan Phase 1 Phase 2 Phase 3 Building domestic capacity Increase domestic competition Increase pace for integration with the international market Implemented the consumer education programme Effective consumer protection & fair market practices Preconditions to greater deregulation and liberalisation CENTRAL BANK OF MALAYSIA 2

3 Challenges Facing Consumers Information asymmetry & level of transparency Innovative & complex financial products Easy access to credit Low level of financial literacy Challenges Changing delivery channels Ageing population & increase life expectancy Young generation & attitude to credit Financial scams Growing consumer debt & reduced household savings CENTRAL BANK OF MALAYSIA 3

4 Approach to Consumer Protection Consumer education goals Empower consumers to make informed & confident decisions Enhances efficiency Allows for best deals Open, competitive & fair financial system Promotes innovation Avenues to seek help and redress Moderate imbalances bet. consumers & financial service providers Mitigate financial risks associated with financial transactions Conducive environment for industry growth and development Maintain long-term consumer confidence in financial markets Approach Good Information Speedy Redress Information must be accurate easy to understand accessible CENTRAL BANK OF MALAYSIA 4

5 Our Approach Target Group Audience Broad based Targeted segment General Public (aged 18 & above) Make financial information available and accessible Guidelines on Product Transparency and Disclosure Product disclosure sheet for ease of comparison Adults Rural communities Women s group Retirees Civil servants Disabled community School children Primary * Secondary* * Including visually impaired school children CENTRAL BANK OF MALAYSIA 5

6 TEXT Our Approach Adults Education Focus ( ) Planning Spending Savings & budgeting Buying tips, comparative shopping Financial Products & services Credit & debt Risk management General issues Product features, risks & benefits, T & C, rights & responsibilities Borrowing & debt mgt, rights and responsibilities as borrowers Basic insurance & insurance planning Redress avenues, illegal schemes, role & responsibilities of other players, insurance intermediaries CENTRAL BANK OF MALAYSIA 6

7 Our Approach Adults bankinginfo & insuranceinfo Delivery Meeting needs Collaboration Broad Based Generic information on financial products and money management/ tools/tips/ comparative tables via printed materials, website, print media Outreach exhibitions / clinics Simple language, direct message, larger fonts, in different languages Website: simple language, interactive, different languages Partners disseminate materials & provide feedback financial institutions/ consumer groups/ngos/govt. Agencies Targeted Segment Provision of information via seminar/ briefing/ advice/ faceto-face sessions supplemented with reading materials Greater emphasis on basic money management and awareness on financial scams Face-to-face sessions/ advice/ discussion Sharing real cases Use community leaders Build network to achieve wider outreach relevant ministries/ state govt./ngos/local communities CENTRAL BANK OF MALAYSIA 7

8 Our Approach School Children Aim Nurture students with good money management habit to become responsible adults Working with schools Providing tools & resources School Adoption Programme In collaboration with Ministry of Education and financial institutions (FIs) School are adopted by FIs FIs impart knowledge on banking and basic financial matters Participated by more than 8,000 government aided schools Students Financial Clubs (SFC) Implemented as one of the extra curriculum activities in schools Engage in money and finance related activities using workshops and games Formed in more than 2,000 schools Pocket Money Bookletlearning tool on money management Duitsaku website interactive portal including on line Pocket Money Booklet Lesson plan Guide for teachers for the SFC Workshop (students) impart knowledge Workshop (teachers) share knowledge and give ideas on activities for SFC Poster competition to promote awareness CENTRAL BANK OF MALAYSIA 8

9 Our approach Disabled community Current target Visually impaired community 1 Translate informational materials into Braille 2 Adult Making bankinginfo and insuranceinfo websites user friendly to visually impaired users 1 Special school for visually impaired children 2 Convert Pocket Money Booklet into Braille 3 School children School Adoption Programme in the special schools for visually impaired children 4 Making duitsaku website user friendly to visually impaired school children CENTRAL BANK OF MALAYSIA 9

10 Progress Distribution of Booklets 1(bankinginfo & insuranceinfo) insuranceinfo bankinginfo Duitsaku.com Membership Statistic Summary 1 10,000 8,000 3,930 4,097 4,196 4, ,000 80,000 75,602 82,349 86,135 6,000 2,530 60,000 60,380 4,000 2,000 - '000 1,200 1,200 2,400 3,600 4,100 4,500 4, (Jan- Jun) 40,000 20, (Jun) Number of Visits 1 (bankinginfo & insuranceinfo ) 350, , , , , ,000 50,000-63,290 19, ,579 Note : Cumulative statistics, as at position 1 Statistics are from inception 2 Statistics are based on latest five years 172,583 35,598 49, ,679 64,512 bankinginfo 243,541 87,265 insuranceinfo 300, ,898 Mar'07 Jun'07 Sep'07 Dec'07 Mar'08 Jun'08 Distribution of Pocket Money Booklet 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, ' ,897 2, ,168 3,906 4, (Jan- Jun) CENTRAL BANK OF MALAYSIA 10

11 On line portals CENTRAL BANK OF MALAYSIA 11

12 Credit Counselling and Debt Management Agency Agency set-up by BNM to help consumers with debt problem Also offers financial education programme and credit counselling Services are free of charge Outreach activities Targets youth, young adult segment and armed forces Participants (17 years old) in the compulsory National Service Programme - various aspect of financial management. A total of 120,000 students involved annually Students at institutes of higher learning developed the Personal Financial Management Module used by a number of institutions of higher learning as part of the Basic Entrepreneur Course beginning 2008 CENTRAL BANK OF MALAYSIA 12

13 General Assessment Work in Progress Engaging consumers How to best engage consumers in financial education? Meeting needs Adequate information Keeping abreast Huge target Entrenched attitude & behaviour Assessment What type of information do consumers need? What is the right mix of style and language to be used? Different books for different age group? What is the right balance between providing too much and too little information? Rapid development in financial markets requires information to be updated regularly How to reach more people quickly & effectively? How to make people practise & internalise what they have learnt? How to measure achievement? Need a base level of financial capability? CENTRAL BANK OF MALAYSIA 13

14 CEP - Recommendations Credible and resourceful driver to initiate and implement programme in building blocks Collaboration with Strategic Partners involve private and public sectors encourage others to promote awareness of financial education: media and other publications driver to coordinate and take stock to avoid duplication National financial education programme identify target group develop programme to suit target group multiple channels of delivery promote national objectives: financial inclusion, promote savings, migration to e-payment Effective allocation of resources Partnership to broaden outreach: publish information in NGO s magazines develop informational material with industry input School adoption programme by financial institutions financial institutions pay / print and distribute informational material train-the-trainers: build expertise & transfer knowledge within target groups CENTRAL BANK OF MALAYSIA 14

15 Thank You Q & A Session CENTRAL BANK OF MALAYSIA 15