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

Digital financial inclusion in Peru

In 15 years, more than 60% of the population will be digital natives Peru 2000 Peru 2025 Peru 2050 80+ 80+ 80+ 75-79 75-79 75-79 70-74 70-74 70-74 65-69 65-69 65-69 60-64 60-64 60-64 55-59 55-59 55-59 50-54 50-54 50-54 45-49 45-49 45-49 40-44 40-44 40-44 35-39 35-39 35-39 30-34 30-34 30-34 25-29 25-29 25-29 20-24 20-24 20-24 15-19 15-19 15-19 10-14 10-14 10-14 5- 9 5- 9 5- 9 0- 4 0- 4 0- 4 -6,0% -3,0% 0,0% 3,0% 6,0% -6,0% -3,0% 0,0% 3,0% 6,0% -6,0% -3,0% 0,0% 3,0% 6,0% Man Women Man Women Man Women Hombre Mujer Hombre Mujer Hombre Mujer 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 Source: INEI Peru: Estimations and projections of the population 1950 - 2050

Knowledge and usage of digital financial services is still limited % of the population with an account in % of the population with an account in the FS that knows new channels the FS that use new channels Financial services by cell phone Financial services from internet Servicios financieros por internet Servicios financieros por celular Financial services by cell phone Servicios financieros por internet Financial services from internet Servicios financieros por celular 53% 52% 47% 46% 46% 42% 40% 35% 20% 17% 17% 17% 14% 13% 11% 7% 18 to 24 years 25 to 39 years National De 18 a 24 años De 25 a 39 años De 40 años a más Nacional De 18 a 24 años De 25 a 39 años De 40 años a más Nacional 18 to 24 years 25 to 39 years 40 years plus National 40 years plus It’s risky Do not need it It’s complicated Reasons for not using DFS However, banking website and apps are becoming an important attribute for choosing a financial institution (SBS, 2017). Source: National Survey of Demand for Financial Services and Level of Financial Culture in Peru (SBS, 2016)

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 Fraud (internal / Lack of liquidity at the external) points of sale Privacy and protection Complex or confusing of personal data interface Inadequate business Inadequate claim practices mechanisms Lack of transparency Adapted from “Well implemented digital finance: Reasons to improve mitigation of customer risks” (CGAP, 2015)

Consumer empowerment in a digital age

Paradigm shift in the population New generations: Paradigm shift Paradigm shift Close and more active role Online FE website and procedures comparators and chat App E-learning Source: Wolrd Bank massive communicati Chatbot on, alerts and reminders Financial tools and games

Financial education initiatives mapping exercise (SBS, 2017) General results Digital Financial Education 5% Baseline 2016: 220 initiatives mapped Social Network 10% 25% Web Sites App 15% SMS Several stakeholders: Over 80 institutions E-learning providing FE 25% Telecentro 20% Relevance of a FE definition, which was included in the PLANEF Only 18 initiatives have experimental evaluations Few initiatives on pensions and insurance, few initiatives focus on workplaces and the jungle Source: SBS, 2017

Financial regulator role in the digital age Regulation Supervision Education Orientation Source: SBS

SBS Digital Strategy: Use of ICTs to enhance consumer empowerment

Websites, online reports and procedures SBS’ Financial Orientation and Education portals Online procedures Online credit report 18

E-learning and comparators SBS’ Financial Education e -learning SBS’ Comparators “ Finanzas en mi Colegio ” e -learning (MINEDU-SBS-CEFI-APESEG) 19

Digital tools and apps SBS app was #5 most popular business apps in Play Store (09.10.2018) and has more than 287 thousand downloads. 20

Massive Communications, alerts and reminders Facebook live Mailing Risk bureau alert 21

Generating financial capabilities in children and youths to interact with financial services in the future SBS has FE programs focused on schools CDS - 2015 / 0019 + Primary school (Pilot) Competency 19 : Manages economic resources with responsibility. Competency 27 : Manages social or economic entrepreneurship projects. Pilot Finanzas en mi Colegio (MINEDU-SBS-CEFI-APESEG-FA) Competency 28 : Works in ICT’ virtual contexts The interrelation of competences will support the use of digital finance.

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