The question these days is how long does it take for kids to take financial literacy classes?

As the world was busy making up for lost time due to the pandemic, many industries were quickly adapting to new realities. Technological disruption has been a common thread in existing and emerging businesses, from e-commerce and logistics to sustainable finance and virtual assets.

Blockchain has been a major technological disruptor, providing individuals and businesses with much-needed monetary infrastructure that has paved the way for them to keep pace with mass digitalization. For budding entrepreneurs and aspiring investors of the Millennial and Gen Z generations, the proliferation of cryptocurrencies has broken down barriers to entry and contributed to the overall advancement of the financial inclusion agenda.

However, we cannot stop there. We still have a long way to go in our advocacy for prudent personal money management and financial inclusion.

Consumer Protection and Economic Participation The era of pandemics and the 4th Industrial Revolution have awakened us to the need to take charge of our personal finances and take an active approach to investing. In addition to improving an individual’s financial situation by providing valuable information about financial concepts and products, financial education helps prevent fraud and leads to better decision-making, enabling people to avoid financial risks, losses, exploitation and excessive indebtedness.

Empowering young people on the future of finance

As financial enablers such as technology, innovation and digital solutions continue to gain momentum, personal finance education is falling behind. Financial literacy seems to be catching up with the rapid evolution of the financial sector. We can no longer afford this reality, especially as we embark on a journey to prepare our young people for the financial markets of tomorrow.

According to the OECD, surveys show that young adults have some of the lowest levels of financial literacy. This is reflected in their inability to choose the right financial products and their lack of interest in undertaking sound financial planning.

In the United Arab Emirates, the Telecommunications and Digital Government Regulatory Authority (TDRA) Digital Lifestyle Report shows that more than 11% of the population are actively investing in digital assets, making educational resources on these concepts an indispensable requirement. Children need to develop the necessary skills that help them choose wisely among different career and educational options, and enable them to manage whatever discretionary funds they may have, be it benefits or part-time. These skills will come in handy later in life, helping people manage their finances, use their savings, and generate differentiated returns.

Role of the private sector

Although rare, some companies have long understood the importance of financial literacy. For example, Mastercard offers a financial education program to help consumers manage their budget and control their spending. Large corporations and SMEs have a collective role to play in eradicating financial illiteracy.

Efforts to educate consumers about financial issues have not been lacking. We are preparing for the launch of the DIFX Academy, an online resource center aimed at educating the masses on trading, financial strategies, digital assets, wealth management and portfolio diversification. The Academy will help us achieve our mission to advance financial literacy for all, empowering users to leverage blockchain and gain autonomy in their personal finances.

Digital – financial – divide

According to a study by Google, Temasek, and Bain & Company, over 60% of adults in Southeast Asia are underbanked or unbanked. The underlying reasons for this discrepancy compared to other regions include fear of the unknown, hidden fees, varying income levels, government policies and perhaps most importantly; lack of financial education. These challenges underscore the importance of initiatives such as Global Money Week, where children aged 13 to 15 and finance professionals come together to raise awareness about finance. Our hope is to see more global movements of this nature targeting all age groups, eventually closing the financial literacy gap between nations.

Low levels of financial literacy have far-reaching consequences, both at the micro and macro level. Financially savvy people tend to exercise better control over their finances and make responsible choices when faced with day-to-day “spend, save, or invest” situations. Financial literacy gives people answers to their most pressing questions, including How often should I eat out? What car loan should I take out? What should my disposable income be? Should I save, borrow, invest and what can I invest in? And much more…

Geraldine L. Melton