Financial Awareness: Developing an Extension of Financial Literacy for Low-Income Populations in a FinTech Context
Examiners: Associate Professor Huang Ke-Wei and Dr Zhai Yingda
Abstract:
Most Financial Literacy (FL) Measurements are focused on savings and investments, as they have been motivated by the shift in responsibility of retirement planning from government towards individuals. FL studies have found that most of the world's adults are financial illiterates. Additionally, billions of individuals belonging to low-income populations (LIPs) do not have the means or access to a retirement planning product. Regardless, they are still measured through the same FL metric that applies to individuals with higher disposable income, and better access to financial products. LIPs do not have the same financial choices that FL measurements (FLMs) assume, thus these measurements are inappropriate. However, they too have, and make financial choices. FinTech is fundamentally changing the way and speed in which LIPs are making these financial choices. It is thus increasingly relevant to create an appropriate measurement that addresses this gap. This paper is a first step towards creating a measurement called "Financial Awareness" that is geared towards LIPs who access financial services through Information Communication Technologies.