Of the 20 countries and economies participating in the assessment, Finnish teenagers placed second after their Estonian comrades in the PISA test of financial literacy. Finland has a long and successful history in PISA tests, but this was the first time that it participated in the financial literacy module. This participation alone tells that Finns now take financial literacy seriously. The results of the 2018 PISA financial literacy test, which assessed the knowledge and skills of 15-year-old students in money matters and personal finance, were published on 7 May.
Awareness of the importance of financial literacy has increased with growing over-indebtedness and the number of registered payment defaults. The measures taken in recent years to manage the problem have been effective: The addition of social studies to the curriculum of grades 4–6 also introduced the subject of personal finances to their education. The teaching hours of history and social studies were also increased. These were excellent changes which will bear fruit in the years to come.
Finland has also tightened the regulation of payday loans, for example with various interest rate ceilings, and the preparation of a positive credit information register has started. Earlier this year, the Bank of Finland took on the role of an impartial coordinator in a project that maps the current state of the measures to promote financial literacy in cooperation with private and third sector participants. This work will conclude with a proposal for a national strategy of financial literacy. The Finnish financial sector is also involved in the work.
“It is important that financial sector expertise is taken as much into account as possible in the project”, says Jussi Karhunen from Finance Finland (FFI).
“Banks, especially, are working hard to improve the level of financial literacy in Finland. They have financed several workshops that teach personal finances and entrepreneurial skills to younger people, and organised classes and personal advice in mobile banking and other digital skills for senior citizens, for example. Voluntary bank employees also aid young people struggling with their finances. These actions reach tens of thousands of people each year”, Karhunen says.
Financial literacy is not just income and expenses – it’s also about digitalisation and scams
Financial literacy should be looked at much more broadly than merely as knowing how to balance your income and expenses or make savings and investments.
“It’s just as important to know how to identify and insure your personal risks, build digital competence, and recognise fraud attempts. Most of the services and tools used for personal financial management are digital – and the rate of digitalisation is only rising. The lack of adequate digital skills makes one much more vulnerable to different kinds of scams and frauds”, Karhunen points out.
Read more in OECD’s press release: Many 15-year-olds struggle with financial literacy, OECD PISA report finds
