Financial education in a digital environment Juan Carlos Chong - - PowerPoint PPT Presentation

Financial education in a digital environment

Juan Carlos Chong Superintendency of Banking, Insurance an Private Pension Funds

The age of digital revolution

What is going on in the World today?

What is going on in the World today?

What is going on in the World today?

Technological disruptions are transforming all sectors The financial sector is NOT the exception

Digital financial inclusion in Peru

• 6,0%
• 3,0%

0,0% 3,0% 6,0% 0- 4 5- 9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+

Peru 2050

Hombre Mujer

• 6,0%
• 3,0%

0,0% 3,0% 6,0% 0- 4 5- 9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+

Peru 2025

Hombre Mujer

• 6,0%
• 3,0%

0,0% 3,0% 6,0%

0- 4 5- 9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+

Peru 2000

Hombre Mujer

In 15 years, more than 60% of the population will be digital natives

Source: INEI Peru: Estimations and projections of the population 1950 - 2050 Adult lt Digit ital l Nativ ive (born from 1980 onwards): 2000 : 4% of the population 2025 : 41% of the population 2050 : 66% of the population

Man Man Man Women Women Women

Source: National Survey of Demand for Financial Services and Level of Financial Culture in Peru (SBS, 2016)

Knowledge and usage of digital financial services is still limited

53% 52% 42% 47% 46% 46% 35% 40%

De 18 a 24 años De 25 a 39 años De 40 años a más Nacional

% of the population with an account in the FS that knows new channels

Servicios financieros por internet Servicios financieros por celular 17% 20% 14% 17% 13% 17% 7% 11% De 18 a 24 años De 25 a 39 años De 40 años a más Nacional

% of the population with an account in the FS that use new channels

Servicios financieros por internet Servicios financieros por celular

Reasons for not using DFS

It’s risky Do not need it It’s complicated

Financial services from internet Financial services by cell phone Financial services from internet Financial services by cell phone 18 to 24 years 25 to 39 years 40 years plus National 18 to 24 years 25 to 39 years 40 years plus National

However, banking website and apps are becoming an important attribute for choosing a financial institution (SBS, 2017).

What is going on in Peru?

What is going on in the financial sector in Peru?

What are the most relevant risks of DFS for the consumers?

Disruptions in services or networks Lack of liquidity at the points of sale Complex or confusing interface Inadequate claim mechanisms Lack of transparency Inadequate business practices Privacy and protection

• f personal data

Fraud (internal / external)

Adapted from “Well implemented digital finance: Reasons to improve mitigation of customer risks” (CGAP, 2015)

Consumer empowerment in a digital age

Paradigm shift Close and more active role New generations: Paradigm shift

Source: Wolrd Bank

Online procedures and chat E-learning Chatbot Financial tools and games massive

communicati

• n, alerts and

reminders

App FE website and

comparators

Paradigm shift in the population

Financial education initiatives mapping exercise (SBS, 2017)

Source: SBS, 2017 25% 25% 20% 15% 10% 5%

Social Network Web Sites App SMS E-learning Telecentro

Few initiatives on pensions and insurance, few initiatives focus on workplaces and the jungle Only 18 initiatives have experimental evaluations Relevance of a FE definition, which was included in the PLANEF Several stakeholders: Over 80 institutions providing FE Baseline 2016: 220 initiatives mapped General results Digital Financial Education

Financial regulator role in the digital age

Source: SBS

Supervision Orientation Education Regulation

SBS Digital Strategy:

Use of ICTs to enhance consumer empowerment

18

Websites, online reports and procedures

SBS’ Financial Orientation and Education portals Online procedures Online credit report

19

E-learning and comparators

SBS’ Financial Education e-learning “Finanzas en mi Colegio” e-learning (MINEDU-SBS-CEFI-APESEG) SBS’ Comparators

20

SBS app was #5 most popular business apps in Play Store (09.10.2018) and has more than 287 thousand downloads.

Digital tools and apps

21

Massive Communications, alerts and reminders

Facebook live Mailing Risk bureau alert

Generating financial capabilities in children and youths to interact with financial services in the future

Competency 19: Manages economic resources with responsibility. Competency 28: Works in ICT’ virtual contexts

Pilot Finanzas en mi Colegio (MINEDU-SBS-CEFI-APESEG-FA)

CDS - 2015 / 0019

SBS has FE programs focused on schools

The interrelation of competences will support the use of digital finance.

+ Primary school (Pilot)

Competency 27: Manages social or economic entrepreneurship projects.

Los Laureles 214, San Isidro, Lima – Perú Central telefónica: (01) 630-9000 www.sbs.gob.pe