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European authorities take stock of financial education and digitalisation

(Clockwise) Global Government Fintech screenshots of initiatives from the Banco de Portugal; Austrian Financial Market Authority; Polish Financial Supervision Authority (UKNF); and Italy’s IVASS in co-operation with Italian public authorities

A Banco de Portugal campaign to boost awareness among children of precautions to take when using digital banking and an Austrian Financial Market Authority (Finanzmarktaufsicht)-created website ‘Reden wir über Geld’ (‘let’s talk about money’) are among more than 120 initiatives captured in a publication collating financial education initiatives across the European Union (EU).

The European Banking Authority (EBA), European Securities & Markets Authority (ESMA) and European Insurance & Occupational Pensions Authority (EIOPA) jointly published what they describe as a thematic repository on financial education and digitalisation initiatives of member state authorities this week.

The publication is focused on initiatives in the increasingly hot topic fields of cybersecurity, scams and fraud. It is the first time that the three EU supervisory authorities (ESAs) have combined to publish such a compendium, which contains 127 national initiatives across the banking, investment, insurance and pensions sectors.

The database, which will be used to prepare a joint-ESAs report on financial education later this year, is published a couple of weeks after the European Commission and OECD International Network on Financial Education (OECD-INFE) released a joint ‘financial competence framework for adults’ to boost individuals’ financial skills. Launching the framework, Europe’s financial services commissioner Mairead McGuinness described levels of financial literacy in the EU as “regrettably low” and “disproportionately impacting the most vulnerable”.

The new framework – as well as a similar joint-framework for young people, on which work will start this year for completion in 2023 – evolves existing OECD-INFE frameworks, adjusting them to the EU context, and integrating digital and sustainable finance skills.

European financial literacy initiatives

Some financial literacy campaigns in the three ESAs’ report have been running for many years. For example, the ‘Finanzas Para Todos’ (‘finance for all’) website in Spain, a joint-initiative between Banco de España and the National Securities Market Commission, has existed since 2008; and the same two authorities have organised a ‘financial education day’ every year since 2015 in October.

Newer initiatives in the report include a 10-episode podcast series in France about banking, savings, investments and fraud organised by authorities including the Autorité des Marchés Financiers (AMF) and ACPR (Prudential Supervision and Resolution Authority).

Further initiatives mentioned include Belgium’s Financial Services and Markets Authority (FSMA)’s development of an online test, launched last June, in order to determine, based on nine questions, potential fraud; a joint-initiative involving two government ministries and other bodies to design a national strategy in Cyprus; and online seminars for elderly citizens part-organised by Germany’s Federal Financial Supervisory Authority (BaFin).

In addition to the three ESAs’ report, an EBA-only ‘repository’ covering (over 217 pages) more than 200 initiatives in relation to mortgage credit, consumer credit, deposits, payment accounts, payment services and e-money (and covering all financial education topics related to banking, not just scams and fraud) has also been published. This is an updated version of a document first published in 2020.

In 2017, a group of nine European organisations and associations, including the European Banking Federation (EBF), launched the ‘European Platform for Financial Education’ partly to encourage EU-level leadership in the field. The EBF has also produced a ‘Financial Literacy Playbook for Europe’.

Improving EU cyber-risk co-ordination

Separately, the three ESAs last week welcomed a recent recommendation by the European Systematic Risk Board (ESRB) on cyber-risk.

On 2 December 2021 the ESRB, which is hosted by the European Central Bank (ECB) in Frankfurt, recommended a pan-European systemic cyber incident co-ordination framework for relevant authorities (‘EU-SCICF’).

Such a framework endorses the potential co-ordination roles of the ESAs as envisaged in the Commission’s high-profile proposed Digital Operational Resilience Act (DORA).

The overall aim of the proposed EU-SCICF is to support an effective and co-ordinated response at EU-level in the event of a cross-border cyber incident that could have a systemic impact on the 27-member bloc’s financial sector.

The ESRB recommendation proposes that the ESAs, in consultation with the ESRB and ECB, assess and analyse current impediments, legal and other operational barriers for the effective development of an EU-SCICF.