29 Oct 2020
Expanding the delivery formats of financial education increases the opportunity for larger numbers of people to access information and support that can help build financial skills, knowledge and confidence.
In 2020, this valuable option has become even more important. Online or web-based delivery of financial education is a critical resource with all face-to-face delivery modes paused for much of the year due to COVID-19 restrictions.
"The aim is to offer a variety of mediums allowing more people to access financial education in a way that suits them best.”
But how effective is online delivery of financial education and how can it supplement traditional modes?
Financial education has been traditionally delivered in face-to-face workshops or one-to-one financial counselling sessions but, even before COVID-19, the need for wider accessibility has long been called for.
To be clear though, online financial education is one option that complements other delivery modes depending on the context of individual needs. There will always be a need for one-to-one, tailored financial guidance or counselling.
Similarly, face-to-face workshops are very effective in many situations for a variety of cohorts and of course financial education is critically important for delivery in classroom settings for children and young people.
The aim is to offer a variety of mediums allowing more people to access financial education in a way that suits them best. The Organisation for Economic Co-operation and Development (OECD) recommends policy makers and program designers take advantage of the opportunities provided by digital delivery tools while still recognising the importance of traditional ones.
There is opportunity for financial institutions to use digital financial education to capitalise on teachable moments when consumers are seeking advice on financial products and services. The application of digital technology to provide consumers with accessible, engaging, unbiased financial education that incorporate tools to help them make decisions can provide a valuable service.
Online delivery benefits
More broadly, the ‘democratisation of education’ describes the proliferation of online learning across all sectors and its potential to equalise access to information. The widespread use of computers and the internet has removed barriers of distance, mobility and time pressures for many wishing to access education. Web-based delivery can also equalise the quality of education which in traditional formats depends heavily on skill and personal attributes of instructors.
Online financial education can widen access to information on managing money and increase the reliability of that information. Many people only seek financial information through family and friends due to a lack of affordable, trustworthy options. If the online financial information is provided by reputable sources, it can be a flexible, accessible and reliable means of improving money management behaviours, skills, knowledge and confidence.
ANZ’s MoneyMinded Online program is comprised of eight interactive modules available at no cost to the public. Research shows, with the right support in place, participants of online financial education achieve similar results to those attending face-to-face workshops.
The OECD identifies a number of advantages in utilising digital formats for delivering financial education including:
Online delivery of financial education can be readily adapted to include multiple languages and facilitate the needs of people with vision or hearing impairments.
Accessing financial education online can also help reduce the social stigma which can be experienced by people if they feel uncomfortable about their financial situations or don’t wish to be seen as needing help with their finances.
Online delivery challenges
Designing programs for digital formats requires responsiveness to changes in devices, screen sizes and other technological functions. There will be the need for organisations delivering education in this format to keep up to date with links, policy changes and other trends that can impact the relevance of the content.
Moreover, while there is a narrowing in the digital divide due to the pervasiveness and reliance upon digital devices to meet social, business and consumer needs, there are still many groups who do not have access to digital devices and the internet or have low levels of digital literacy. This makes it important to continue offering a variety of methods to facilitate widespread access to financial education in the community.
Web-based and online delivery of financial education presents some challenges to capturing and responding to feedback unless there is live chat facility. Providing face-to-face financial education either in workshops or one-to-one allows the participant to ask questions in real time - and the instructor can readily gauge levels of participant understanding through interaction with the participant. As technology develops however, interactive features are increasingly offered through various platforms and these challenges can be overcome.
Evidence of effectiveness
The efficacy of online financial education modules needs more testing. There are limited evaluations available and the few studies there are primarily conducted with student populations in the US.
A study conducted with high school students in the US who completed an online module “Soar to Savings” showed significant improvements in student knowledge after doing the module. Similarly, a large study with US undergraduate students who completed an online course “Financial Literacy 101” between 2012 and 2017 also found the program increased students’ subjective knowledge.
One of the few non-student studies exploring online financial education was conducted in Columbia. The program was targeted to participants of a cash transfer program, mostly lower-income females. The randomised evaluation showed significantly positive impacts on participants’ knowledge, behaviours, attitudes and overall financial health. The effects of the program were found to have lasted approximately two years.
Related to but not the same as web-based financial education, the use of online forums has shown to be beneficial to people seeking financial information. Online Self-Organising Social Systems (OSOSS) can be a useful complementary mode to traditional financial education or other sources of financial information.
These are all promising indications of the opportunity for online education. As a complement to traditional delivery, online delivery is likely to be an increasingly important platform.
Roslyn Russell is a Professor in the School of Economics, Finance and Marketing at RMIT University
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
29 Oct 2020
22 Oct 2019