Why financial literacy is more important than ever

All the disintermediation that the internet and mobile apps have brought to the banking and investment world also place much more responsibility in the hands of the individual customer and investor. Customers have to:

– Manage the safety of their funds and accounts (passwords, tans, online identity)
– Filter through a large number of trustworthy and malicious financial providers
– Learn about and become familiar with using online banking and mobile banking/brokers
– Educate themselves through adequate staff and sources on potential investments

Users have more options for banking and financial service providers than ever before, while having a much larger and broader choice of assets to invest in.

For all these reasons, financial literacy is more important than ever. Especially given that in a field of prolonged low-to-no-interest environment, they are basically forced to invest in order to withstand the always-persistent impact of inflation and to protect their purchasing power.

Why financial literacy is currently lacking in the school system and beyond

While the need for financial literacy is bigger than ever, customers’  financial education is still lacking. Our educational systems haven’t caught up, public schools and universities teach about accounting and algebra, but most don’t teach our children how to save, invest and manage their money and assets. While some countries have initiated efforts to teach financial skills in schools and colleges, much more action is needed (Lusardi 2019, p. 6).

Unfortunately, this lack of financial literacy leaves many people exposed to and makes them easy prey for unscrupulous and reckless fraudsters, scammers and financial services provider who market and sell risky or fraudulent investments to “make a quick buck”.

This begs the questions:

What can be done to remedy the situation?
How can we build our own and the general financial literacy within our society?
What actions and measures are best-suited to increase financial literacy in children and adults?

Needless to say, such important questions need to be up for public debate. In our view, it would first require a broad consensus amongst and commitment of government, educators, banks, financial service providers and other stakeholders, that a high level of financial literacy is essential.

In the first step, a ladder of priority for necessary skills and competencies would have to be defined (Lusardi 2019, p. 1). Then, the financial literacy of the population would have to be measured with an adequate, science-backed instrument or survey. The revealed gaps between necessary and actual skills and competencies would reveal a gap that offers priorities on where teaching and education must start. Then, it could be discussed, who could teach these skills and competencies in what best way to what target group. Such educational programs must be targeted at the individual needs of specific target groups and the programs’ success must be measured by scientific methods.

Most importantly, however, every single individual has to take full responsibility for their own education and financial future. Financial literacy has always been, is and will continue to be a self-acquired skill.


Furrer, F., & Dietrich, A. (2012). Geschichte des Online-Banking: Vom Telebanking zu Mobile Banking. URL: https://blog.hslu.ch/retailbanking/files/2012/08/Blog-Online-Banking-Furrer-Dietrich.pdf

Lusardi, A. (2019). Financial literacy and the need for financial education: evidence and implications. Swiss Journal of Economics and Statistics, 155(1), 1-8.

OECD (2011). Measuring financial literacy: Questionnaire and guidance notes for conducting an internationally comparable survey of financial literacy. Periodical Measuring Financial Literacy: Questionnaire and Guidance Notes for conducting an Internationally Comparable Survey of Financial Literacy. URL: https://www.oecd.org/finance/financial-education/49319977.pdf

Wittkamp, B. (2020). Mobile Banking. In Köpfe der digitalen Finanzwelt (pp. 233-244). Springer Gabler, Wiesbaden.