National Adult Literacy Agency calls on government and financial services to do more to support vulnerable customers access the services they need.
Details of a new research report was launched today Friday 16 December by Mairéad McGuinness, European Commissioner for Financial services, Financial stability and Capital Markets Union. The research shows that many people are struggling to understand and access financial services in Ireland and as a result are more vulnerable to fraud.
Specific groups experience disproportionate barriers to accessing financial services, such as older people, travellers and migrants. This is mainly due to all financial services moving online, as many customers:
- still use cash,
- have unmet digital literacy needs and have not received relevant training,
- do not have access or cannot afford digital devices and broadband, and, or
- have poor broadband speeds that do not allow enough time to complete financial transactions on mobile apps or online.
People say that the rapid digitisation of banking cause them the greatest difficulty, and that they feel:
- pressurised to move online even though they don’t have the necessary digital skills or access,
- intimidated because they lack confidence online,
- confused as there is an assumption of prior knowledge by financial institutions, and
- excluded from financial services because of branch closures and the reduction of customer service staff.
Financial literacy in Ireland report
The National Adult Literacy Agency (NALA) commissioned the research ‘Financial Literacy in Ireland: Challenges and solutions.’ NALA is now calling on government and financial service providers to implement a range of recommendations from the research to enable people to access the services they need and create a more equal society.
The research report was launched by Commissioner McGuinness at an event at 2pm in Europe House, Dublin on Friday 16 December.
Speaking before the launch, Mairéad McGuinness, European Commissioner for Financial services, Financial stability and Capital Markets Union said:
“Technology and innovation mean there are all sorts of new ways to access financial services. The NALA report highlights the importance of financial literacy – know your money – especially in a digital era. It also points to some of the difficulties facing people who do not have access to fast internet connection or the right device.
NALA’s research contains vital recommendations for financial service providers and policy-makers. I’m also glad to see that this report links into our work at EU level to increase people’s skills and knowledge around their finances in this increasingly digital era.”
Colleen Dube, NALA CEO said:
“This research shines a light on the real difficulty people are having around the country managing and accessing financial services. We already know that over 40% of the adult population have average or below digital skills. This means there is a mismatch between what financial services are offering and what the public need and can use. As we all grapple with the cost of living crises and rapid digitalisation, the government and financial services must design and deliver appropriate responses to ensure the most vulnerable citizens can access services to avoid further marginalisation and exclusion.”
The report sets out a series of recommendations for financial service providers and policy makers to address unmet financial literacy, numeracy and digital literacy needs in Ireland.
Recommendations for financial service providers:
- Implement measures that support customers as they transition from offline to online financial services. For example, provide better phone support, including reducing branching menus or options, avoiding long number sequences and quicker access to a customer service representative.
- Provide training for staff on how to respond appropriately to individuals with unmet literacy, numeracy and digital literacy needs.
- Take a ‘point of time’ approach to providing information to customers. Give them the information they need to know at the time they need to know it. Do not overload them with unnecessary information.
- Design services based on customer needs, using universal design principles to improve accessibility and build trust and confidence in customers.
Recommendations for government policy makers:
- Provide more education and training on financial literacy. This involves the development of literacy, numeracy and basic computer skills, which underpin everyday financial activities.
- In accordance with the Central Bank’s Consumer Protection Code, make current training and instruction materials for using online banking services available in plain language, through literacy-friendly guides, for the identified vulnerable groups.
- Implement a cross-sectoral and departmental financial literacy strategy led by the Department of Finance, with stakeholder engagement, that adopts or adapts the EU / OECD Financial Competency Framework to the Irish context and consolidates the current financial inclusion and regulatory activity.
- Lead a coordinated state led anti-fraud campaign.
Clare McNally, Communications Manager, National Adult Literacy Agency 087 648 6292 firstname.lastname@example.org
Quotes from people who took part in the research about banking:
“I can’t go to the machine to check my balance. They had one in [nearby town] and actually took it away, so you could check your balance but you can’t do it now.”
“What stops me from going into the bank is that it’s all online services now. So, it’s automatically assuming that everybody knows how to use online banking.”
“They could say to you ‘Do you want to sign up for online banking? It’s very, very easy, you can do it here, we’ll make a new password, and we’ll give you your details’. You give that, then you’re set up, and then they think you can, but you might know nothing else about it.”
“I’d rather have the physical context of cash because you know what you’re using. If you think I get the wages on Friday, and I think it should be 200 euros, but if everything is done by the direct debit, it’s gone if you know what I mean. Whereas if you pay in the post office, you can decide on the amount. And if things are tight, you can skip.”
“Sometimes I can just click, click, click and it works, and then sometimes it doesn’t. And that covers your WIFI and theirs and all sorts of things … It’s up there, scroll up, scroll down, scroll back, scroll over, so I just give up.”
About the research
The National Adult Literacy Agency (NALA) commissioned the Think Tank for Action on Social Change (TASC), to research the experience of people with unmet literacy, numeracy and digital literacy needs in accessing financial services.
- consolidates existing research on the topic;
- presents new research with individuals with unmet financial literacy and digital literacy needs;
- identifies the awareness and responses of financial service providers to these issues, and
- sets out a series of recommendations for the Irish Government and financial sector to develop effective solutions to ensure financial inclusion and to create a more equal society.
Between October 2021 and March 2022, the following was conducted:
- review of relevant literature and policies
- survey of existing customers identified as vulnerable (100 responses)
- in-depth follow up interviews with six of those respondents
- survey of 15 financial service providers (primarily retail bank providers)
- consultation with the advisory group to discuss research findings
- Bank of Ireland (BOI)
- Competition and Consumer Protection Commission (CCPC)
- Irish Banking Culture Board (IBCB)
- Irish League of Credit Unions (ILCU)
- Money Advice and Budgeting Service (MABS)
- NALA’s Board
- Society of St Vincent de Paul (SVP)
The National Adult Literacy Agency is an independent charity committed to making sure people with unmet literacy, numeracy and digital literacy needs can fully take part in society and have access to learning opportunities that meet their needs. We are a leading campaigning and lobbying force on adult literacy issues. Read about NALA’s work