According to Vijay Eswaran, founder and executive chairman of the QI Group, over the past decade, financial inclusion has increased among the ASEAN member states as COVID-19 accelerated the spread of digital financial services and payments. In the Philippines alone, bank account ownership jumped from 29% in 2019 to 56% in 2021. But while financial inclusion has grown, financial education and literacy lag far behind.
Just 30% of people in most countries in Southeast Asia, according to the S&P Global Finlit survey, are financially literate. This is one of the lowest financial literacy percentages worldwide. This means many Southeast Asians have limited financial knowledge and skills in managing money effectively, leading to poor financial decisions. At the micro level, this situation can lead to greater inequality, stifled growth, and an economy vulnerable to shocks and downturns such as the impending global recession.
Financial education is a crucial factor in driving up financial literacy and supporting economic growth. While citizens in ASEAN countries today have various financial instruments available to them through technology, they need more financial literacy to explore opportunities. Financial education can help make these emerging services more accessible by reducing confusion, increasing confidence, and empowering individuals to make more informed decisions.
What’s being done in Southeast Asia
ASEAN countries have recognized the need for financial literacy in an increasingly digitized economy and have implemented various financial education initiatives utilizing technology in different ways.
Malaysia established the Financial Education Network (FEN), including institutions like Bank Negara Malaysia, the Securities Commission of Malaysia, and the Ministry of Education. The group formulated a 5-year roadmap to implement long-term financial education policies and initiatives. Credit Bureau Cambodia (CBC) launched a mobile app to support Cambodians in managing their finances and cultivating good credit habits. It includes financial health checks and credit monitoring.
In Indonesia, the Financial Services Authority (OJK) introduced a National Strategy on Financial Literacy. The strategic direction for the 2021–2025 period was based on the results of a National Survey on Financial Literacy and Inclusion conducted in 2019, evaluating past and ongoing financial literacy activities and implementing financial literacy programs in other countries. It encourages financial technology companies, educational institutions, and government agencies to work together to educate citizens on how to manage their money using digital financial products, also considering data privacy and cybersecurity risks.
In the Philippines, the Bangko Sentral ng Pilipinas (BSP) recalibrated its National Strategy for Financial Inclusion last year to transform strategies into priority activities, key performance indicators, and targets based on the behavioral change of Filipinos in recent years. In support of this initiative, the BSP deployed satellite internet services in two rural banks to promote access to financial services in remote areas.
These initiatives are commendable and it’s important to do follow-up actions to realize success. As private and public organizations across the region's endeavor to increase financial inclusion and improve financial education, a unified framework becomes more significant than ever to help ensure stakeholders can collaborate, strategize, share best practices, and effectively target their efforts to the most underserved communities. By working together to develop a comprehensive, multi-pronged, and multi-layered approach, we can lift the lives of millions of individuals and families in ASEAN while building a stronger and more resilient regional economy for the digital age.