The Bank of Finland has submitted a proposal to the Ministry of Justice for Finland’s first national financial literacy strategy. The objective of the strategy is for Finns to have the world’s best financial literacy by 2030. The Finnish financial sector has had its sights set on a national strategy for several years and cheers this progress.
The Bank of Finland and the Ministry of Justice agreed a year ago that the Bank of Finland would be responsible for drawing up a national strategy to promote financial literacy in Finland. The strategy proposal was prepared together with key actors and researchers in the field, including Finance Finland (FFI) and its member companies. The proposal’s aim is that as many people as possible would understand the importance of financial literacy in their lives and be capable of making good financial decisions.
Having received the proposal, Minister of Justice Anna-Maja Henriksson stated that she intends to present funding for the implementation of the strategy.
Insurance and risk management often neglected
The financial literacy of Finns is on the average good, but the main focus tends to be on everyday spending, saving and investing, balancing personal finances and avoiding over-indebtedness. These skills are absolutely essential and can also be found in the submitted strategy proposal.
”However, the skills needed to obtain adequate insurance cover, and holistic thinking about one’s own risk management are often overlooked. Likewise, the ability to identify various frauds and scams is very important”, says Piia-Noora Kauppi, Managing Director at FFI.
The submitted proposal fortunately also takes risk management and insurance skills well into consideration. Risk management skills include, for example, the ability to assess the adequacy of one’s own income in both expected and unexpected life events, such as illness. Understanding how the occupational pension system works and what security it provides is essential for assessing one’s livelihood during retirement. Furthermore, the Finnish society has comprehensive public insurance schemes, which are complemented by voluntary insurance policies such as travel insurance or home insurance.
Overall digital skills are also strongly linked to financial literacy, especially among the senior age groups. Consumers need to be able to learn and adapt when service channels, purchasing, paying and consequently the use of money are constantly changing as a result of digitalisation. This aspect of digital and media literacy as elements related to the operating environment is also taken into account in the strategy proposal.
Vision: Finns will have the world’s best financial literacy by 2030
(Ministry of Justice press release)