As prepared for delivery
Let me first of all take this opportunity to thank you, Your Excellency Governor Mugur Isarescu, for this outstanding initiative of bringing together all the major players in the area of financial education in Romania in order to set the course for a joint effort that is crucial for the development of any economy and society.
I would also like to thank Minister of Education, Remus Pricopie, for supporting the educational programmes in this field and for planting the seed of financial literacy in early school.
It is a real pleasure for me to welcome the presence of other representatives of the National Bank of Romania and of two major non-governmental organizations that lead the way towards a better informed young generation and society in terms of financial knowledge. I also welcome the presence in the audience of Visa’s member banks, of other companies and NGOs that are actively involved in unrolling or supporting various projects in the financial education area.
It is an honour for me to represent Visa Europe and to be part of this inspirational endeavour. I was looking before the conference into the booklet I received and I was really impressed to see what diverse and creative financial education programmes are being unrolled in Romania. This is great. It is this commitment that, along with the Government’s vision and strategy, moves things forward and turns generous ideas into effective projects.
Today, together, we will be learning from shared experiences in the financial education projects developed on the Romanian market. We will add the long-time expertise of NGOs that run successful programmes worldwide. And we will be looking to identify new ways for providing people a broader and better access to improvement of financial skills, through our combined resources, expertise and joint efforts.
Three years ago I spent several days in Romania visiting some of the villages outside Bacau. It was quite an eye opener for me, and for my Romanian colleagues. Amongst the poverty and hardship, I was most struck by the children.
We went to a village elementary school, a room filled with 30+ children from the village. There was a fire going, but the children still needed to wear coats, hats and scarves to keep warm. One little girl still haunts me. A big smile, and big dark eyes, she wore a pink hat. Andrea was about 7 years old. She had a multitude of siblings and was being looked after by her grandmother whilst her parents were away working. When I spoke to her, she said ‘I am going to be a doctor’.
I hope she succeeds. But I have to admit that the odds are against her. The majority of children in her village, and others like them, drop out of school by the time they reach 11, if they get that far. The 2.5 mile walk through the forest, in the dark of winter is too much even for those who are not kept home to be ‘useful’ collecting firewood or looking after younger siblings.
By the end of the second day I was all for Visa buying a bus to take the children to school, until the specialists from UNICEF explained – very patiently – that would do no good at all unless the children used the bus. For that to happen, their parents would have to be convinced that it was worthwhile for the children to continue with their education. For that to happen, the families would have to have some more basic social and welfare services provided. In many cases it is about getting them access to the services that they are entitled to. That is what we have been working on over the intervening time.
The long term impact of education is a topic that concerns governments, academics, NGOs and the commercial sector alike. There’s been publicity this week about the potential for lessons to be provided to children in rural India via computers and data stored in the cloud. Universities are increasingly providing modules, free of charge via the internet – MOOCs.
There are many definitions to the financial education. The Organisation for Economic Co-operation and Development defines it as the process by which through information, consumers develop the skills and confidence to become more aware of financial risks and opportunities, to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being.
Irrespectively of the formal definition, when we talk about financial literacy we are usually referring to a set of skills that allow people to manage their money wisely. We can extend it to some understanding of essential financial concepts that allow people to make better judgments about their finances. And ultimately, we can extend it further to understanding the relationship between their own finances and the wider economy.
However, many of the beneficiaries of these programmes, who are very young, probably are not aware of the meaning of the concept of financial education. Probably cannot envisage either the wealth of opportunities that lies beyond these words. But for sure they feel its immediate power. The way it changes their lives. And after all this is what financial literacy is all about: empowering people.
At Visa Europe we know very well what empowering means. As a leading electronic payments organization, we operate in an extremely dynamic and challenging environment. Because electronic payment is not only an area that changes at amazing speed with the advance of technology, but it is also an important part of our daily life.
New sophisticated payment instruments emerge at a fast pace and we are invited to embrace them and take advantage of a wide array of benefits that simply improve our lives. It is a whole new territory, exciting and even fun, that is waiting to be explored. And key to that is information. Knowledge. Education.
All across Europe our websites and products help young people improve their financial knowledge and skills and manage their money, and we run programmes and initiatives to support financial education.
Since 2006, the company has hosted a series of financial literacy conferences, which have drawn attention to the issue and provided a forum for discussion amongst related stakeholders.
But just as in business, so it is with financial education. We know one size does not fit all, and that is very much Visa Europe’s experience.
In some markets we work in partnership with our members to make financial education a reality accessible by many. For example: Turkey, Israel, Bulgaria, Greece. We will hear more about this type of working today.
I will just briefly mention Turkey, where we have joined forces with our member banks to support the first financial education programme for young people: I Can Manage My Money. The project, launched in December 2009 and run in partnership with UNDP and local partners, uses peer to peer education to show young people how to budget and make wise choices regarding their finances.
We have built on this learning. In Romania we are working with a network of strategic partners: the Ministry of Education, the National Authority for Consumers’ Protection, UNDP, Biblionet, member banks and our long-time partner Junior Achievement. JI created scale via access to the school curriculum. Through an innovative approach, BaniIQ project proved to be successful in facilitating financial education for many Romanians. But even more important, it is now part of their lives. Every day. This is what we aim for.
At the same time, BaniIQ is a perfect example that public-private partnerships can generate value for society. Let’s have a look into how this programme was born. (BaniIQ movie-Part 1, approx 1 min). About the results of the BaniIQ programme so far and its more and more ambitious targets we will find out later from Visa Europe country manager, Catalin Cretu.
In other markets the banks are confidently delivering financial education very much under their own steam. Direct to citizens or working in partnership with charity. For example, in the United Kingdom, the Personal Financial Education Group is the UK's leading financial education charity. Backed by financial institutions it provides resources and lesson plans, help and advice to anyone teaching children and young people about money.
Romania was the first to bring a digital component to the programme. And, it continues to pioneer for us new ways to use digital techniques to teach. Any youngster and adult will acknowledge the power of play when it comes to learning. So, it is only appropriate that the mechanics of game-play are applied to our resources – the jargon is ‘gamification’. A game mind-set leads to having fun and to developing those all-important problem solving skills.
We have been delighted to work with Junior Achievement. My team and I are very excited about the prospect of linking up with JI in other markets throughout Europe. Their access to schools and ability to get financial education included as part of the curriculum has made a step change to the programme. It has enabled us to scale up, in a way that we haven’t managed to do anywhere else.
We are excited about the possibilities – to reach 500k people by 2015 in Romania. To take the digital learning and apply it to lots more markets. I have Spain, Greece and the Nordics in my sights.
But do we really need so many financial education programmes? Are they really useful? Let’s see how much financial literacy matters. In a society where financial services play an increasing crucial role, financial education tends to become more a basic need than an optional set of skills. It has a direct impact not only on the individual living standard but also on the stability and efficiency of the financial system.
Looking ahead, to the challenges and the opportunities of the next period, Europe has set its own agenda for growth: Europe 2020, that goes beyond the impact of the economic crisis and addresses the fundamental issues that society faces. 2020 sets the foundation for a sustainable growth model, focusing on several key areas that include also education, social inclusion and poverty reduction. Financial education plays a vital part in this strategy and ultimately in the long term economic development of any society, empowering people to appropriately manage their resources in order to ease their lives.
In order to accomplish our goals we have strong allies: the digital society, the easy access to information and increased usage of social media. We also have the authorities, private sector and civil society’s openness and willingness to join efforts to build stronger and more comprehensive financial education programmes, able to reach a larger number of people and maximize the effects. This is a partnership for the future. As the very title of this conference says, financial education is a long term investment in the future of society.
It is a long journey that takes time, resources and a clear vision. And I am honoured to be here today, as I am convinced that this conference makes an important step in that journey.13 March 2014