Abstract
What makes the issue of financial literacy relevant to various social groups and the State as a whole today is the dynamic development of the market for financial services, the rapid and extensive digitalization of such services, and changes in the structure of the market caused by the emergence of new segments and new actors. A financially literate consumer will make well-informed, responsible decisions in relation to services provided by financial institutions. Financial literacy has a direct effect both on the wellbeing of a particular individual and on wellbeing across society and the State as a whole. It tends to take on particular significance at a time of certain crisis situations. The recent COVID-19 pandemic situation has brought into clear view both the significance of requirements for the establishment of effective forms of disclosure of information in the market for financial services and the need to expand the information instrumentarium intended to improve the financial literacy of the population. Many countries have in place comprehensive legislation on protecting the rights of financial consumers, as well as relevant case law. However, that alone does not resolve most of the quite specific objectives for enhancing financial literacy – and, consequently, does not protect the population from various risks and unjustified financial losses. The authors argue that it is the use of social media – as the more sought-after and mass way to spread information in today’s world – that will help expand the audience of recipients of financial education. The paper analyzes a set of factors that influence the process of boosting the role of social media channels inimproving the financial literacy of the population and examines a set of relevant resources and tools employed in various countries to build an infrastructure for financial education. The authors also discuss the need to devote attention to the arrangement of educational activities for financially isolated and undereducated strata of the population and, in this context, focus on the right choice of media channels and means of financial education to ensure equal access to financial products and services. Copyright © 2021 by Academic Publishing House Researcher s.r.o.
Highlights
Financial literacy can be defined as a person’s ability to comprehend the various aspects of finance, including financial products offered by financial institutions
Materials and methods The authors drew upon statistics on the use of social media around the world (Most Popular, 2020; Social Media Usage, 2019), materials from public and private Web platforms dealing with financial literacy, national strategies for financial education adopted in certain developed countries, and relevant working materials and guides used by certain international organizations
Financial literacy is typically an input to model the need for financial education and explain variation in financial outcomes
Summary
Financial literacy can be defined as a person’s ability to comprehend the various aspects of finance, including financial products offered by financial institutions. In response to a call by the G20 Finance Ministers and Central Bank Governors to the Organisation for Economic Co-operation and Development (OECD) in February 2011, the institution developed the High-Level Principles on Financial Consumer Protection. One of the key principles facilitating the protection of the rights of financial consumers is Financial Education and Awareness. There is a need to develop appropriate mechanisms to help existing and future consumers develop the knowledge, skills, and confidence to appropriately understand risks, including financial risks and opportunities, make informed choices, know where to go for assistance, and take effective action to improve their own financial wellbeing. There is a need to promote the provision of broad-based financial education and information to deepen consumer financial knowledge and capability, especially for vulnerable groups. Specific programs and approaches related to financial education ought to be targeted for vulnerable groups of financial consumers (G20 principles, 2011)
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