Transcript Basic Banking Services - Portal Rasmi Bank Negara Malaysia

Enhancing Consumer Financial
Capabilities: A Canadian
Perspective
The 3rd International Forum on Financial
Consumer Protection and Education
Kuala Lumpur
December 14, 2005
Overview
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About FCAC
Financial Literacy vs Financial Capability
National Symposium on Financial Capability
FCAC and Financial Capability
About FCAC
Who We Are
• Created October 2001 by FCAC Act
• Independent federal government agency regulating
federal financial institutions on consumer provisions
• Report to Parliament through Minister of Finance
• Commissioner appointed for 5-year term
• Funded by assessments on federally regulated
financial institutions
About FCAC
What we do
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Protect: Supervise FRFIs’ compliance with
 “consumer provisions” in Acts & Regulations governing them,
and
 their own codes of conduct and public commitments
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Educate: Expand consumer education about
 consumer rights and responsibilities
 financial services and products
About FCAC
How we do it
• Yearly Budget of $8.1 million
• Contract out non-core activities
• Commitment to stay small, agile and focussed on
“Consumer First”
• Website and toll-free number
Financial Literacy
Some definition
– “The ability to read, analyze, manage and communicate about
the personal financial conditions that affect material wellbeing. It includes the ability to discern financial choices,
discuss money and financial issues without (or despite)
discomfort, plan for the future, and respond competently to
life events that affect everyday financial decisions, including
events in the general economy.”
- The Institute for Socio-Financial Studies (ISFS)
Financial Literacy
Components
Knowledge
Financial Literacy
Confidence
- Cutler and Devlin (1996)
Financial Capability
Observation
– “It is a mistake to believe that only those on low
incomes or in disadvantaged areas need financial
literacy. People need to be equipped with the skills,
knowledge and confidence to ensure they make
informed judgments and take effective decisions
regarding their own financial circumstances.”
- UK Department for Education and Skills
Financial Capability
Three interrelated dimensions
Financial knowledge and understanding
Financial Capability
Financial skills and competence
Financial responsibility
- FSA and BSA (2002)
Financial “Literacy” vs. “Capability”
Advantages of Financial Capability
– Goes beyond knowledge and confidence
– Acknowledges stages of developments
– Makes fewer presumptions
– Hind, Kempson and England
Financial Capability and Public Policy
It has been found that financial capability can contribute
to social and economic inclusion by:
– Enhancing Social and Economic Inclusion ;
– Increasing uptake of public programs;
– Helping consumers benefit from less costly
payment arrangements (e.g., direct deposit).
National Symposium on Financial Capability
• Held in June 2005 in Ottawa, Canada
• National and international participants
• 4 main objectives
– Explore what financial capability means and review
current knowledge
– Evaluate impacts of financial capability training
– Inform policy makers
– Opportunity for networking
National Symposium on Financial Capability
Proposed Definition of Financial Capability
“…enabling environment that ensures that all
consumers develop the skills and confidence to be
aware of financial opportunities, to know where to go
for help, to make informed choices, and to take
effective action to improve their financial well-being”.
National Symposium on Financial Capability
Financial capability interventions should
include:
– Information
– Training / education
– Advice
National Symposium on Financial Capability
The Impacts of Financial Capability
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Promotes social inclusion
Increases the use of mainstream financial services
Reduces individual financial barriers
Allows for better financial decisions over the life course
National Symposium on Financial Capability
Next Steps
– Additional research
• Environmental scan (domestic)
• Int’l financial capability policy and practices
– Establish database of existing programs and
organizations (domestic and international)
– Move toward a Steering Committee
• Role for public, private and voluntary sectors
FCAC and Financial Capability
Informing consumers about their rights and responsibilities
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Opening a Personal Bank Account
Cashing your Government of Canada Cheque for Free
Low-Cost Accounts
Cheque Inserts
Train-the-trainer manuals and outreach partnerships
Call Centre
CHP Database
FCAC and Financial Capability
Helping consumers understand financial products and services
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Understanding Your Credit Report and Credit Score
The Cost of Payday Loans
The ABCs of Mortgages
Considering an Investment Product Tied to the Stock Market's
Performance?
– Qs and As Database
FCAC and Financial Capability
Helping consumers get the best financial products and services
– Cost of Banking Guide
– Credit Card Interactive tool
Thank You!
Questions? Comments?