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Report reveals Europe’s financial capability gap

By Nick Jones, Former Head of Digital Comms and CSR • Visa Europe

October 05, 2016

The world is changing. Young people face immense pressures. Our countries are going through radical change. Governments try to make sure economies grow once more. And, business faces digital transformation or disruption. All have interests in growing the skills of young people to spur jobs, growth and innovation. But do those young people have those skills?

Financial literacy is a particularly special skill. It cuts across so many aspects of society and the economy. It is a must for individuals as they manage their own careers, livelihoods and families. That’s why business needs to understand the impact of financial education. What does business really need from the entrepreneur experiences it sponsors? Do money management courses work? Can a company volunteer bring benefit to the business as well as the classroom?

Six months ago we set out to answer those questions. Today we have the answers that will shape financial education policies and partnerships across Europe.

The recently published Sharpening Financial Education report, produced by JA Europe and sponsored by Visa, confirms there is a gap between the financial capability of young people and what business needs in terms of financial skills and knowledge. Key findings include

  1. Young people lack ‘financial planning’ and budgeting’ skills, the most missing and needed financial skills to enter the workforce – whether as an entrepreneur or employee.
  2. European educational systems should contribute more to equipping young people with the right financial skills.
  3. A combination of public and private initiatives would be the best way to improve financial literacy.

Running the right partnerships really is the key to closing the gap.

Around the world since 1995, Visa has been providing parents, teachers, students, governments, and consumers of all ages with high quality, free resources that help teach the fundamentals of personal finance.

Today, technology and innovation are changing not only the way people think about money and manage their personal finances, but are also changing the way the financial education needs to be delivered. This pace of change makes it all the more vital that young people are equipped with money management knowledge and skills. They need these skills for work and for success in a digital world.

At Visa, championing financial education is in our DNA because fuelling economic growth is at the core of what we do every day. As the world’s leading payments technology company, and as a global corporate citizen, we know we have an important role to play and we take this responsibility seriously.

We are proud to join together with JA Europe to support this important research. We hope this report improves the understanding of the gaps that exist today. It identifies a strong business demand for financial education across Europe. We also hope the data gives insights and the case studies provide inspiration. We are also encouraged that the right financial skills mix can help young people think entrepreneurially.

Finally, we call on more businesses to engage with schools and universities so more young people have opportunities to develop the financial knowledge and skills they need to thrive in today’s world.

Next steps

Review the report to find out which skills are most in demand.

Learn from these country case studies how the right financial education partnerships can bring benefits to your business and community. Romania, Turkey, Spain, Poland and the United Kingdom.

This research contributes to the EE Hub. EE stands for entrepreneur education and the Hub is a network of European companies, academics and policy makers who want to give more students the chance of an entrepreneurial experience. After all, it is a great way to deliver financial education. The Hub has created over 60 good practice guides. So, read some and move forward with financial education.

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