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Financial literacy required

What is financial literacy in the first place? There are various definitions of financial literacy. Some people regard it as the ability to understand basic financial concepts such as interest rates and inflation, while others regard it as a broader knowledge and knowledge that includes financial decision-making, such as the way people think about money and risk tolerance. Some see it as an ability. The U.S. Financial Literacy and Education Commission, established in 2003, defines financial literacy as “the skills people need to make individual financial decisions and actions to achieve their goals. Skills, knowledge, tools” ¹. As introduced in the previous article, various Fintech startups and major financial institutions have adopted the trend of financial literacy in recent years. We are trying to get customers early by offering

　According to a report ² released last month by the Milken Institute, an American think tank, both young people and adults in the United States lack the basic knowledge and skills necessary to make sound financial decisions. , as a result, economic well-being is greatly impaired. He pointed out that this is caused by the difference in educational opportunities given at school and at home from an early age, and that if this situation continues, the inequality between economically wealthy families and those who are not may expand further. doing.

　People tend to avoid talking about money. However, in today's world where many financial products are overflowing, it is necessary to learn about money correctly in order to be able to use financial services with confidence. In particular, it should be noted that young people who are familiar with digital services are likely to be targeted by fraud. For years, research by the Better Business Bureau has shown that young people are more likely to be scammed than older people, who may be the typical victims. It is Similarly, a Federal Trade Commission study found that the fraud rate of 44% for those aged 20 to 29 is more than double the same rate of 20% for those aged 70 to 79. ³.

　With the spread of the Internet, it has become commonplace to buy not only books and music, but also clothes, furniture, and fresh food online. Financial products are no exception. More and more people are able to buy financial products online without visiting a bank branch or listening directly to a sales representative. Stock trading is getting easier and easier, and more than a few people will start trading like a game. A previous report by the Milken Institute states that the rapid spread of digital financial tools is accompanied by new risks such as fraud and data privacy issues. knowledge and skills” must be included.

　Out of the myriad of financial products on the Internet, how many people can choose the product that really suits them without being a victim of fraud? Eddie Behringer, CEO of Copper, a startup that provides financial literacy education apps, said, "More digital access doesn't necessarily mean better financial literacy⁴." points out. In times like these, the importance of financial literacy is increasing.

¹ “U.S. National Strategy for Financial Literacy 2020”, U.S. Financial Literacy and Education Commission

² “Financial Literacy in the United States”, Milken Institute

³ https://www.straitstimes.com/business/invest/oh-yes-young-people-may-be-easier-targets-for-scams-0

⁴ https://www.nytimes.com/2021/08/27/business/kids-financial-literacy-apps.html?searchResultPosition=14