FSB: Financial Education is Key to Driving National Development

Financial education has been hailed as a key tool in empowering citizens and driving national development objectives. This is the underlying theme that emerged at the Seminar for Financial Education, hosted by the Financial Services Board (FSB) in collaboration with the Access to Insurance Initiative (A2II), International Association of Insurance Supervisors (IAIS) and the Finmark Trust recently.

In opening the Seminar, Mr Ismail Momoniat the Head of the Tax and Financial Sector Policy Division at the National Treasury highlighted that: getting better outcomes for the financial sector requires a multifaceted, a holistic approach that encompasses financial education, financial inclusion, proper market conduct, clear dispute resolution mechanisms and a legal framework that allows development and enforcement.

Mr Momoniat further highlighted that the Twin Peaks reform that is currently underway aims to ensure that the financial sector produces the correct outcomes and appropriate protection for customers. Twin Peaks will create a model of regulation that will see the FSB becoming the Financial Sector Conduct Authority (FSCA) and the South African Reserve Bank (SARB) becoming the prudential authority. It is envisaged that these changes will bring a stronger, more comprehensive approach to regulation and supervision, while minimising regulatory fragmentation that allows poor outcomes to be produced.

The seminar brought together over 150 delegates from 15 African countries and beyond. Participants represented a cross-section of stakeholders involved in financial education, including government ministries; central banks and regulators; industry associations; academia and a range of international organisations and NGOs. Delegates engaged with a wide array of speakers who provided insights from empirical research as well as lessons learnt through practical implementation. 

Topics covered included national strategies, consumer protection, best practices, the business case for financial education and measuring impact. Throughout the course of the two days, a number of emerging and sometimes controversial issues were also discussed, including the use of digital technologies, how to affect behavioural change and the fine line between financial education and marketing. .

 Lyndwill Clarke, Head of Consumer Education at the FSB says: “This seminar highlighted the common problems that countries and institutions have in implementing effective Financial Education, but that opportunities such as this helps to provide solutions to a very challenging topic.” 

The discussions showed that challenges in financial education are similar across sub-Saharan Africa and that important lessons could therefore be learned from existing experiences. The Seminar reinforced that financial education is an integral part of financial inclusion and to be successful it must:

• Receive support from senior leadership in national Governments
• Be a coordinated effort involving all stakeholders in the financial sector
• Focus on the needs of the consumer and be targeted to the audience
• Integrate monitoring and evaluation and learn from the results. 

The outcomes of the seminar will inform a Global Declaration on Financial Literacy, which is currently being considered by the OECD International Network on Financial Education (OECD/INFE) to encourage cross-border sharing of ideas and best practices, as well as the collection of related data and evidence to support the development and implementation of effective financial education policies.