Financial education in a digital environment

Juan Carlos ChongSuperintendency 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 disruptions are transforming all

sectors

The financial sector is NOT the exception

Digital financial inclusion in Peru

-6,0% -3,0% 0,0% 3,0% 6,0%

0- 45- 9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-79

80+

Peru 2050

Hombre Mujer

-6,0% -3,0% 0,0% 3,0% 6,0%

0- 45- 9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-79

80+

Peru 2025

Hombre Mujer

-6,0% -3,0% 0,0% 3,0% 6,0%

0- 45- 9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-79

80+

Peru 2000

Hombre Mujer

In 15 years, more than 60% of the population will be digital natives

Source: INEI Peru: Estimations and projections of the population 1950 - 2050

Adult Digital Native (born from 1980 onwards):

2000 : 4% of the population

2025 : 41% of the population

2050 : 66% of the population

Man Man ManWomen WomenWomen

Source: National Survey of Demand for Financial Services and Level of Financial Culture in Peru (SBS, 2016)

Knowledge and usage of digital financial services is still limited

53% 52%

42%47%46% 46%

35%40%

De 18 a 24 años De 25 a 39 años De 40 años a más Nacional

% of the population with an account in the FS that knows new channels

Servicios financieros por internet Servicios financieros por celular

17% 20%14% 17%

13%17%

7%11%

De 18 a 24 años De 25 a 39 años De 40 años a más Nacional

% of the population with an account in the FS that use new channels

Servicios financieros por internet Servicios financieros por celular

Reasons for not using DFS

It’s risky Do not need it It’s complicated

Financial services from internet Financial services by cell phone Financial services from internet Financial services by cell phone

18 to 24 years 25 to 39 years 40 years plus National 18 to 24 years 25 to 39 years 40 years plus National

However, banking website andapps are becoming animportant attribute forchoosing a financial institution(SBS, 2017).

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

Lack of liquidity at the points of sale

Complex or confusing interface

Inadequate claim mechanisms

Lack of transparency

Inadequate business practices

Privacy and protection of personal data

Fraud (internal / external)

Adapted from “Well implemented digital finance: Reasons to improve mitigation of customer risks” (CGAP, 2015)

Consumer empowerment in a digital age

Paradigm shiftClose and more active role

New generations: Paradigm shift

Source: Wolrd Bank

Online procedures

and chat

E-learning

Chatbot

Financial tools and

games

massive communication, alerts and

reminders

App

FE website and

comparators

Paradigm shift in the population

Financial education initiatives mapping exercise (SBS, 2017)

Source: SBS, 2017

25%

25%20%

15%

10%5%

Social Network

Web Sites

App

SMS

E-learning

Telecentro

Few initiatives on pensions and insurance, few initiatives focus on workplaces and the jungle

Only 18 initiatives have experimental evaluations

Relevance of a FE definition, which was included in the PLANEF

Several stakeholders: Over 80 institutions providing FE

Baseline 2016: 220 initiatives mapped

General results Digital Financial Education

Financial regulator role in the digital age

Source: SBS

Supervision

OrientationEducation

Regulation

SBS Digital Strategy: Use of ICTs to enhance consumer empowerment

18

Websites, online reports and procedures

SBS’ Financial Orientation and Education portals

Online procedures

Online credit report

19

E-learning and comparators

SBS’ Financial Education e-learning

“Finanzas en mi Colegio” e-learning(MINEDU-SBS-CEFI-APESEG)

SBS’ Comparators

20

SBS app was #5 most popular business apps in PlayStore (09.10.2018) and has more than 287 thousanddownloads.

Digital tools and apps

21

Massive Communications, alerts and reminders

Facebook live Mailing Risk bureau alert

Generating financial capabilities in children and youths to interact with financial services in the future

Competency 19:Manages economic resourceswith responsibility.

Competency 28:Works in ICT’ virtual contexts

Pilot Finanzas en mi Colegio(MINEDU-SBS-CEFI-APESEG-FA)

CDS - 2015 / 0019

SBS has FE programs focused on schools

The interrelation of competences will support the use of digital finance.

+ Primary school (Pilot)

Competency 27:Manages social or economicentrepreneurship projects.

Los Laureles 214, San Isidro, Lima – Perú

Central telefónica: (01) 630-9000

www.sbs.gob.pe