The Finnish level of financial literacy looks good in international comparison, but comparative studies have also revealed gaps in Finns’ economic knowledge and behaviour. These findings were published by the Bank of Finland in a recent report which analysed a number of Finnish and international studies. There is now need for domestic long-term study of financial literacy.
According to the BoF expository report, Finns are mainly interested in money matters. They are not a homogenous people, however: interest in finances is more prevalent among men and those with higher education or higher income. Not many commit to long-term financial planning. Finns are generally interested in saving, but often fail to carry through in practice. Heavy growth in the number of registered payment defaults also tells some consumers have pronounced difficulties in personal financial management.
Although financial literacy is a well-established field of scientific research, Finnish researchers have not been very active in the area. Financial literacy has, however, been studied in light of different contexts, such as in connection with insurance or retirement preparedness. Studies have also provided valuable insight into how the financial capabilities and well-being of younger citizens are influenced by individual differences and the overall socio-economic situation.
The BoF report considers it a significant shortcoming that a comprehensive, general-population survey has not been carried out in Finland since 2014. In the future, it would be important to conduct regular interview surveys to monitor the state of Finns’ financial literacy.
The latest international data on Finns’ financial literacy will be available on May 7, when the results of the PISA financial literacy survey are published. This is the first time that Finnish students’ financial literacy has been assessed in a PISA survey.
The Bank of Finland expository report lays groundwork for the strategy work on financial literacy launched by the Bank in 2020. The preliminary stage of the strategy work will be focusing on mapping out the dozens of private and third sector actors who, in addition to the authorities, carry out work to improve citizens’ financial literacy in Finland. The activities of the various actors should be coordinated and monitored more effectively in the future. Finance Finland (FFI) is a member in the network put together by the Bank of Finland.
“We will be working to promote the broad definition of financial literacy, which not only includes money use, saving and investing, but also covers insurance and the ability to recognise fraud attempts. Digital skills are also an essential part of financial literacy, because personal financial management is more and more dependent on digital tools”, says Jussi Karhunen, who coordinates financial literacy work at FFI.
