Tuesday, Sep 08, 2020
How Supervisors Can Improve the Effectiveness of Financial Education
This Gender Equality and Financial Inclusion CoP webcast discusses the 2020 TC Note on Financial Education
Read the full transcript
Demet Canakci:
Hello everyone. Thank you for joining us today, my name is Demet Canakci. I'm a program director at Toronto Centre. Welcome to our Financial Inclusion and Gender Equality, Community of Practice webinars series. Today's session is devoted to Toronto Centre's recent supervisory guidance note, known as TC notes on how supervisors can improve the effectiveness of financial education. We are delighted to host the co-authors today, Olga Fuentes and William Price, to talk about the ways in which supervisors can improve the effectiveness of financial education and literacy initiatives in the face of significant and longstanding gaps in consumer understanding. You have received their bios, so I will briefly introduce them. Olga is a pension and labor expert with more than 10 years of experience in regulation and supervision of pension, and unemployment insurance systems. She is currently deputy chair of regulation at the Chilean Pension Regulator. She's also vice president of the International Organization of Pension Supervisors.
William is the CEO of D3P Global, he has worked for the World Bank, U.K Treasury, U.K Pension Regulator and International Organizational Pension Supervisors. He is a member of Toronto Center's advisory board for insurance and pensions, and also contributes to Toronto Center programs for pension supervisors as a program leader. Before I pass this over to Olga and Will, I want to thank our funders Global Affairs Canada, the Swedish Sida, the International Monetary Fund, Jersey Overseas Aid and Comic Relief, USAID, without whom we couldn't achieve our global mission. We have a great discussion ahead of us and look forward to your questions. Please use the Q and A tab to submit your questions during the presentation. It is now my pleasure to hand over the session to Olga and Will for their presentation. Enjoy the session, over to you, Will and Olga.
William Price:
Great. Well, thanks very much for the kind introduction and I will start. Let me just get the screen up. Yup, so I'll start and then hand over to Olga and then finish it off. So we're going to just do three things. First of all talk about the scale of the problem, then the main part, Olga's going to go through some case studies and examples of things that can work, and then we'll just finish with some key lessons from the note. We should say at the outset, this is an extremely difficult problem. And when we were first asked to write the note, one of the issues is you think, actually this is extremely tough and there's lots of activity, but not necessarily very much evidence of things that work. And so we looked into the quite deeply about things that will work and we'll go through a lot of examples of those. But it's worth stressing that this is something where things can be effective, but you need to be cautious about not doing things or just having initiatives which are likely to be unsuccessful.
And one of the reasons for saying that is if we go to the first slide, firstly, just the scaling, so looking at the globe picture here, the darker blue means countries where people score better on these classic four questions where you are... Essentially do they understand inflation and do they understand compound interest rates? And you get to some countries typically sort of OECD countries where maybe you get above 50% and that's only people can answer three out of four. And the problem is even if you can answer four out of four, it doesn't make you financially literate, it's just a good way of finding out how to kind of benchmark countries. So the scale is difficult across the whole world and it's also problematic in terms of particular groups. So first of all, one of the pioneers in this area, Annamaria Lusardi talks about the average rate of financial literacy is around about 30% of people. You can answer three out of the three main questions and then the average hides gaps and vulnerabilities in particular subgroups of which women is one and there's a, highlight's lack of confidence.
And you see the graph on the right hand side is also by age. Well, on the one hand you may expect the very young who have less experience in financial services have very low levels of literacy and it improves as you go throughout your life, kind of peaks when you're entering the period at the end of a working life and then begins to fall off as you get some sort of age related decline. But you can see there's a very large discrepancy in some groups and there is particularly a discrepancy on average in gender. So here we're looking at different countries all over the world and the blue bar being men and the red bar being women.
And on average men around 35%, women around 30. And the key thing for me was there is a gender discrepancy, but everyone is pretty horrible about financial literacy apart from smaller groups. So when we're thinking about solutions, you've got to think about solutions which work with a very low level of literacy. Not really work on the assumption that you're going to have some magical training program, which makes everybody a finance professor. And it's better to think, hope for the best and prepare for the worst. The different major economies, people tend to score slightly higher, emerging economies people tend to score slightly lower and on average there is a discrepancy though not always. And then when you look into more desegregated data, so looking at this sort of complicated picture on the right, lots of different countries, there's actually the study this is based on is over 30 countries, but this is a snapshot.
A positive number is where women are performing better than men, a negative number where men are performing better than women. And you see obviously as you'd expect, there's differentiation across countries and there's also differentiation depending on the type of question. So the first question in this study is more of a budgeting, if you're going out shopping, spending real money. And then there's more of a technical look at this graph question. And then there's, I don't know quite how to take the final one. The final one uses the analogy of a sports ticket, where men do particularly well on sports tickets, but much worse on actually going out and doing the shopping, which is kind of item A, which is not good for my agenda. But anyway, there's a lot of differentiation.
So you should start with the assumption in your country that things are going to look bad, but quite how bad they are and in which areas we're going to depend. And then, in quite a detailed chart, of course, when you're approaching this on the gender perspective, there are a whole bunch of gender issues in which people on the call are going to be far greater experts than I am. But one of the key things obviously in a pensions retirement case, is that women live longer. So on the left hand side in the red box, here you have by different countries life expectancy at retirement. So there's a gender divide. So this part, left hand side is males, right hand side is female, but there's also an income level discrepancy. And if you're a low-income male, you're going to have the worst life expectancy in your country typically, and a high income female is typically going to have the best life expectancy.
Female will often have the same high life expectancy as a high income male. And then there's a twin issue here, on the one hand better life expectancy is a good thing, but on the other it means there's a particular increase in a retirement challenge. So there are a bunch of issues which women will have to be focusing on in addition to all the normal things and Olga is going to go into this in more detail, in terms of difference in labor market experience and access to resources. So let me, with that sort of slightly depressing picture on the data, hand over to Olga. And as we say, we want people to sort of start with knowing this is a pretty tough thing to deal with that there can be successful solutions, but to be thinking that you have to be doing a whole bunch of extra than just financial education. So Olga I will stop there, I'll try and stop sharing now. Yeah.
Olga Fuentes:
Okay. So a good morning, everyone, thanks the Toronto Center for the invitation, to talk about this topic. And what I have is a review of practical examples in which you can learn a little bit of which type of financial education tools or the ones that are able to get the better results. So the idea here is, the focus of this section is to talk and to see what the supervisors can learn from practical examples of positive intervention. So what other regulators and supervisors have done, and which of these financial educational programs or tools has been more successful, and what is the reason behind for having this positive result.
So the key in terms of implementing a beneficial and positive financial education program is testing and adapting. And when possible, try to do pilot before performing the escalation to the total population or the population that is the focus of the financial educational program. So doing the pilot, actually you have the opportunity to improve the program. And also avoid sometimes these negative impact that you weren't aware of in advance. And so you can use different approaches to do the design. So you have the focal groups, you have something that is called usability test, but also academia recommends, when possible to try to do design these experimental approach. So experimental approach, you can test different interventions and you use random selection of individuals to try to capture the effect of the intervention without the noise produced by other differences between the people participating in the test.
So in general, what you do is that you define a control group, you define a treatment group, you might have more than one treatment group, because you would like sometimes to test more than one intervention and also the interaction between them. And what you do is to assign randomly the individuals to these groups, to be able to capture the effect of the intervention. So you can get more robust insight doing this. And also, like I said before you can foresee that sometimes some of these programs can have negative effects, or you can solve that before, do the escalation. And also is relevant to do the testing and adapting, because you can always can get very good recommendations and you can look at what other countries have done. And you can have just a baseline of what the type of strategy is better than other, but they're also a specific element of your particular jurisdiction or the population that you want to reach, that the testing and adapting give you more insight on how to do that and be more effective.
So the first example is this paper by Carpena and Zia, they did an experimental evaluation to analyze how financial education change financial behavior. And they did it for different financial services. So they did on budgeting savings, borrowing and insurance, and they test the different treatment effect. The first one was just give a very generic financial education, that was [inaudible 00:15:39] based type of financial education program. And then they interact the financial education program with a goal setting exercise, also they interact the financial education with given personalized counseling. And then they interact the three of this element. So this was a pretty mental evaluation in India, and the goal setting, and the personal counseling was given to the individuals at their home, was during a period of a four to five month. And what they always thought that at the end, better outcomes are the ones that combine these financial educational program, but also other specific and more personalized interventions.
And also, the other element that was relevant in this study was that they understand financial literacy as a more broad conceptualization. So they define financial literacy as a combination of financial numeracy and financial awareness, and financial attitude. And through these interventions, they test the effectiveness of these three elements. So basically the main result, is that only when you change attitude, in terms of having individuals understanding the benefit, for instance of having a saving account, the benefit of looking for some type of insurance, you get positive result and offering just a simple and generic financial educational program doesn't have a significant impact in financial behavior. So the next slide can give you the same type of result, which are, what is the effect of financial education on improving long-term savings?
And here you have a list of papers with interventions in different countries. And the main result is that only when you combine some type of financial education with the access to having, for instance, a banking account, you get a long-term effect. When you just allow people access to a saving account without any other program that compliment that, the medium to long-term effect in increasing savings and increasing the welfare for the health could disappear. Also in the same line you have this experimental evaluation and we give free access to bank accounts in Uganda, Malawi and Chile and again without doing anything else, the final result is that did an improve savings or wealth.
Also when you look at debt payments and credit card payments, you also see that there emerge these other type of mechanisms, in which, for instance, if you send reminder notifications by emails or very simple goal setting mechanisms, you can improve in reducing household debt. And then finally, you have the FCA, experimental evaluation with credit card, this was focused on individuals with automatic minimum payments and the treatment with that show a positive effect in reducing the debt was the one that sent the individuals a nudge or an e-mail notification on how to reduce and increase the payment because this individual, they didn't have the liquidity constraint. The problem here was that they were not able to see what will be the cost in the long run of just paying the minimum.
So all these are effective tools that you can use and implement in your own jurisdiction. Then we move to see also in which way you can use personal statements on personalization, to improve financial outcomes for members. So personal statement are critical for transparency for all financial products, and in general the regulators, determine by regulation or by law, what is the minimum content, the standardized format and also the common assumptions that the financial service providers need to satisfy, when they send this personal statement. Also by regulations, you have that the timing, how many times in a year period the statement have to be sent to members. So this give supervisor the opportunity to test the content of this personal statement, to try to improve a positive behavior for members.
And for instance in the case of pensions, personnel statement also are used to deliver information to stress the long-term outcome of the product, or the long-term perspective of pension savings. And you have examples of this in Chile, Mexico, and the Netherlands. So here you have one example. So in the pension regulator require pension fund administrator to send four times a year, a personal statement to members. And once a year, that personal statement need to include a pension projections. And what we did here was instead of sending the same information to everybody, we did the information age specific. So for instance, for individuals that are younger than 35 years old, they just receive generic and general information on how the contribution made earlier in life, impact in a more the pension outcomes.
And then for middle-aged individuals they receive two projections, to compare the effect of making several contributions in the future, with effect on pension of have a 100% of density of contribution in the future. So that is the example that you have there at the bottom of the slide. So basically what you get is that what will be your pension, if you stop making contributions and retire at age of 65, and then what will be your estimated pension if you contribute every month until your retirement age. And then for women above age 50 and men above age 55, they receive a similar information, but the distinction is that you to get to show them the pension that they will get if they retire at the legal retirement age, compared with the pension that they will get if they postpone their retirement by three years.
So the idea of having this is try to incentivize individuals to contribute more and also to have an estimate of a pension value, because that is a calculation that is not very easy to do, right? So you see how much you have in your saving account, but you cannot foresee how much you will get if you have that total savings. So then another example is, we also introduce a pension simulator and this is an interactive tool, because we get very positive result with the information that we include in the personal statement. So the next step was to work in a pension simulator to do this as an interactive online tool. And the goal of this was to allow people the possibility of, play with the tool online and see directly the effect on pension, of changing different parameters, like postpone retirement, increase the voluntary savings, increase participation, choose a different investment path.
So having this simulator, we did an experimental evaluation to see the effect of carrying this. And we randomly assigned members to the control and the treatment group. And we assigned them using the last digit of their ID. And the control group just received general advice, and the treatment group received the personalized projection given by the simulator. So the measure of the effect of the following, the overall impact was a positive and significant effect on voluntary contributions. But what we saw also, was that the effect begin to disappear after the ninth month of the intervention. And the last result was that the news effect is also relevant because for those individuals that overestimate their pension, they increased the voluntary savings more on average, by almost 17%.
So the main result and recommendation of doing this experimental evaluation was that delivering personalized and customized information is very relevant if you want to have an impact on savings. And second is that you need to have different mechanism in place to ensure that this decision have permanent effect and not only a short-term effect. And again here, what type of mechanism are useful? Not just reminder emails and also in the case of the online tool, facilitate the voluntary savings within the tool. So just take the advantage of the individual making this exercise and allow them to play with the tool to see the effect on pensions, and if they want to save, allow them to do that right away, through the same tool. And also I think that this type of tool... So you have calculators for other financial services or for other financial product.
So I think that this type of tool and the recommendation that arise from this type of studies also can be easily applied to different financial products. The other example also related to pensions is that people when they have to retire, they have to choose a pension product. And here also we did an experimental evaluation with annuity. So in Chile we have electronic system that allow individuals to get quotations from the industry. And what we saw is that a very small percent of individuals were choosing the higher value or annuity value. And also we are seeing this result, one of the conclusions that we brought was that, that difference in terms of what individuals are choosing was not because of the credit rating of the annuity provider, because this come... Actually just allow to participate to annuity providers with a high credit rating.
So it was more related with how the information was displayed and what type of information was delivered to members. So we did something very simple. We just keep in the table that that individual receive, the company name, the monthly pension in pesos, and the annual loss in pesos. And we saw in the experimental evaluation that the selection of the higher offer increase to 60% in the treatment group compared to only 25% in the control group. And actually we did this change in the regulation, in the way that individual receive the offers and even though we have to wait a little bit more to see the more medium to long-term effect, we are seeing how the selection has improved, just because of the way in which you present that information. So finally just to summarize and talk a little bit about gender differences. So we saw at the beginning that financial literacy tend to be lower for women also for young individuals. Also women have lower market participation compared to men, lower income profiles, lower contribution densities and women live longer on average.
And also they face more financial challenges than men in terms of the access to formal financial market and the use of borrowing instrument. So, improving the women financial literacy is very key to promote their financial participation and financial security. So some consideration in terms of taking into account gender differences, when you give personalized information, actually the differences between gender are implicit in the tool. For instance, in the pension simulator, the difference between women and men are behind the projection. Women has a different income profile, they have a much larger number of periods without making contributions, they live longer. So basically, for woman that they need to get the same pension target as a man, she will need to have a higher accumulated savings. And if you have women interacting with the tool, she's going to get exactly that, she's going to get a different recommendation in terms of the total amount that she needs to save to be able to get that pension target.
But maybe, I mean, independent of that, I think that is very interesting to see, and this make me think a lot about what we can do in terms of gender, is that even though you have the same educational tool, maybe you can test if making gender specific framing, give you additional results compared with the one when no distinctions made. And also you can also make gender specific recommendations and for instance, in the pension simulator, if you see that the main challenge for women is participate in the pension system. So maybe you can make a recommendation to the women using the tool to improve participation in terms of changing the investment strategy for instance. And you can give men a different recommendation based on what you see is a challenge more related to men than women.
So I think that you can test that and see if you get the additional positive results. And then just to give you an example related to gender differences, this was an experimental evaluation made for the credit market access. And so what the main result is that, in Chile there's a significant bias against women in the sense that the credit approval rate was 20% lower than men, even when you consider that women has a better performance paying the credit, and this result didn't change when information was given regarding the better performance of women paying credit. So here, the solution in this case goes beyond education of having the proper information delivered to them, in the case of the law male officers working at the banks.
So, the other suggest that the change attitude is needed. But again, if you go back to the first paper that I show you in which the authors talk about financial literacy as a broad concept, in which financial attitude is also an element, you can see that here also there's a lot to do in terms of the attitude in which these officers can change to be able to offer credit to the women population. So now I move to William, to talk about the specific recommendation that arise from all these case studies and analysis, that we have in the note. Thank you very much.
Demet Canakci:
Thank you Olga.
William Price:
Yeah. Sorry, just unmuting. So let me just briefly for people who haven't read the paper in detail, go through the seven recommendations. And I should say, we came up with these recommendations knowing that people, particularly women and particularly low-income women are probably some of the most sophisticated people in terms of finance, and know where the money is going to the nearest cent. And so none of this is a criticism it's really saying the problem is often not so much a lack of financial literacy, the problem is the product or the design of the system is not the right one to make sure it works with the way that people are. So the first recommendation, I talked about being, having interventions as part of a risk based approach. And what that means is if we want better gender equality, for example, if a key risk is low take up by women in financial services, we'll look at what are the most effective interventions to mitigate that risk.
Now it may be financial education, if you've tested it and you have good evidence. But it may be, you need to change the incentives. So rather than have say tax relief for savings, have flat rate contributions or matching contributions, because tax relief inherently will benefit those who have higher income, more stable jobs. And if they tend to be men not women you'll get agenda disparity. So number one is make sure you look at all of the initiatives, all of the interventions to improve equality, and then only use the financial education if it is the right one against those. Number two, the test and adapt, I mean that's basically the whole thrust of what Olga's gone through. If we go back the previous slide. So the third one, I should say also on the test and adapt, it will also tell you things that don't work, so nest in the U.K, which has been a pioneer in doing lots of these things.
Some things they've done have been amazing and very successful. Other things they've done, turns out that when it was being live tested a good theory didn't turn out to work in practice. And that's absolutely fine, you're trying to see what works and what doesn't work. Number three, develop the partnerships. So if there were one thing that people could do after this, you may not be able to do the intervention straight away, but if you're a supervisor or if you want to influence supervisors, get the group of people in your country who can do these kind of interventions and develop the partnership now so that you can start to build the capability. Number four, looking for interventions that are not standalone, but you combine it with an improvement in policies. So if financial education doing something on its own is quite tough, but if you had something where there's a big new product launch or requirement for insurance, or everyone joining pensions, or having the choice, having a big financial education push around something very specific and high profile is more likely to be successful than if you're just throwing financial education initiatives into a vacuum, or just, there's no particular reason why you're communicating to people about it at that time.
So to go to the final slide. So for adults, number five says, "Avoid broad-based generic financial education, since this is rarely likely to be useful." We're saying be country specific. I'm sure we found any examples of just this kind of broad based come in and do a couple of hours, we'll tell you about finance, where that really is successful. So focus on the testing, the adaptations that we are mentioning, but also on various specific things where you have to do, you're starting a job, you're having a child, you're getting married, specific life events where people may be more open to making decisions or trying to get more information. On the other hand, number six, it does seem that classroom interventions for children can have an impact, not because they have a transformational effect and suddenly they turn a kid into a financial wizard, but often because theY can be very low costs because you already have kids in that environment. You can do marginal improvement and so they don't have to have a massive benefit for them to be cost effective interventions.
And then the final part, of course you should have information and disclosure, and you should make sure that people, the providers have the right disclosure, but really it's this thing that we started out, having low financial literacy you can do some things to improve it, but it's not a crime, it's not something that you can just blame people and say, "Well, they should have been better at it." You should in a financial services system, work with the assumption that people will have low financial literacy now and for a period to come and then think, okay, so what is the product and the design, and delivery, I mean that they can interact?
And I like the example from India where there's a centralized infrastructure, nor an account administration and investment, but you can work with lots of different groups in terms of the way that you can gain access to the system, the enrollment of contribution. So you don't want your self-help group which has a lot of high trust with local people getting into a 30, 40 year business like pensions and savings, or getting into complex areas like the whole insurance industry. But if they are trusted intermediaries, find ways in which you can use them, but linking them into a more centralized infrastructure. And so let me stop there and hand back over to Demet. And very happy to take some questions.
Demet Canakci:
Thank you very much Will and thank you Olga. That was very good presented, very brief and explained all the points in the Toronto Center Note. Thanks again for authoring this very useful note and joining us today. So I will move to questions, I see some on the chatbox, you already responded to one of them. I'll start with the rest. What would you recommend is the sustainable and cost effective interventions to address financial education gaps among low-income segments in less developed countries during the COVID-19 pandemic. Will perhaps you can take on and Olga can contribute.
William Price:
Sure. So I think I would be focusing on something which is very specific to how you get through day-by-day. So I think it's going to be very tough, say to do a pension or long-term saving discussion during COVID-19, because it's a survival, how to improve your daily budgeting, how to maybe get access to lower cost credit. So think about the things where there are the particular pain points and maybe just choose one, maybe two, but don't try and do anything general. And then if people are going to have to borrow more as they probably do to get through the very tough times, I might target something where it's the simplest cheapest access to credit, avoiding all the really bad high cost access to credit or something about just daily financial budgeting to cut your costs.
Demet Canakci:
Thank you Will, Olga would you like to add something?
Olga Fuentes:
Yeah. So I think that some seem ready like, focus that you can do... Is that the government is introducing these type of subsidies to individuals during the pandemic. So this is happening here in Chile and we have emergency family income, the employment protection benefit, and sometimes people don't get and don't understand how to get them, what are the requirement. So if you want to be very pandemic specific and try to help people that maybe just given that information in a platform, very simple to understood and very simple to get, you can do something that is going to be beneficial for them currently actually.
Demet Canakci:
Thank you Olga. Well more COVID-19 related question. The paper speaks about the challenges and opportunities of digital financial literacy, can you speak more about the implications COVID on digital financial literacy, as well as any gender implications or issues related to digital financial literacy?
William Price:
[inaudible 00:48:43] Yes. Same order. I mean maybe one of the few silver linings of the pandemic is that at least in some areas people are using the FinTech more financial payments, just some people not wanting to take cash. So maybe that there's some element to which people are going to be sort of more open to trying some of the new things in terms of the digital approach. I think for all of these things, it would be what are the platforms that people are using? So if you're looking particularly for gender, so there are hundreds and hundreds of different payments platforms, for example, and some with large providers, some are very small providers. I would be looking in my country, which are the ones that women are actually using, and then maybe trying to pilot or target those groups and work with some of those providers to... If the aim is to sort of improve savings, for the next pandemic, almost if you like, work with those people who maybe there's a basic bank account, but then there's a savings capacity that's not being used and see if you can develop that relationship.
But just be completely open minded. Because my guess is, some providers, some apps, some solutions work, as we all know, even the whole M-Pesa in Kenya by Vodafone works incredibly effectively. It's been quite difficult to get that model in other countries, but other countries have other forms of digital payments and digital savings, which work. So try and work through the route that's working. And then also just a point I made before in terms of, if you're then getting into very long-term savings, don't try and turn a really nice payments app into a go to work with 30 and 40 years. Use it as the link point to something which is more stable and will definitely be there. So you're creating an infrastructure where the access in payments can be very flexible and ubiquitous, but they're core, how do I run my system for 30, 40 years is a little more stable.
Demet Canakci:
Thank you Will. Olga do you have anything to add to Will response?
Olga Fuentes:
Yeah, I think that the world post-pandemic is going to be one that the labor in which we work is going to change. And I think that part of that change is going to be permanent. So I think that we need to try to think about how to incorporate individuals doing it, what is called today these nonstandard forms of work. So I think that the participation of the nonstandard forms of work is going to be larger after the pandemic. And then you will have new challenges in which, for instance, how to incorporate them to the pension system, how to make them to save in a regular basis, how to make them to use different financial products. So I think that that is a challenge, but also it's an opportunity, because we have that problem today.
We have a self-employed workers or informal individuals that doesn't contribute much, that they don't have a lot of savings. They have a more volatile income profile and you need a financial solution to them. So I think that we are going to learn a lot of these pandemic. And also I think that you're going to have a lot of material to reach some segment of the population that didn't have access before. So just think about all that have been done in every country, in every school. So I have a kid seven year old he's, he's doing online classes. So imagine all the material in terms of education that is available, that you can put together and then offer that to all the children's that never have access to this material, because the material is there. I mean, I have it in this platform, in this online platform. The teachers already did pay the fixed cost of having all these materials available. So I think that there's a lot of opportunities.
Demet Canakci:
Thank you Olga. One, another question for both of you, do the authors have any comments on the fine line between provider led financial literacy and product marketing? How should supervisors encourage very, very old programs that literacy programs that are more product neutral?
William Price:
Yeah.
Demet Canakci:
Same order perhaps.
William Price:
No shit with that. But also two, a couple of quick things. I am suspicious on financial education initiatives offered in general, particularly from the provider. Because I just think they can be a kind of easy solution for providers and politicians where it's, we have a problem, we have low coverage, our literacy is bad, let's have a big initiative they're quite cheap to do. But they may be not putting in the most effective interventions, so if you take, say an issue of fees in any financial services product offered, it may be that the fees are far too high and you need some control over the fees or you need to have a way of making the products more competitive. So in that context if a provider came up with a great financial education so you can understand the fees better and shop around between different providers.
I think that's very unlikely to be the most effective intervention. So, A, I'll be little bit suspicious and only really go with them or expect them to be useful if they are not in those areas where there's real harm going on. To get them to be more neutral, I think lots of people, or there are good examples internationally. So you have common assumptions, you use common projection approaches, you don't allow particular overly optimistic assumptions. And then some of them can be very good because they can be incredibly innovative, but particularly I would prioritize then people who will happily do, all the things that Olga went through in terms of, if you have a provider who would have the initiative, plus that allow it to be sort of used in this kind of test and adapt with viable data, then that would be a good indication that they had their heart in the right place. If they don't want to have transparency, then that would be something which is a little more programmatic.
Demet Canakci:
Thank you Will. Olga? Please.
Olga Fuentes:
Yeah, I think that regulators and supervisors can like, or do this define minimum standards for financial providers in terms of [inaudible 00:56:27], instead of reaching individuals with a type of educational campaign that look more like a financial education strategy and not much as a marketing strategy because sometimes their financial providers, understand a financial education campaign as a marketing campaign. So I remember once in Chile that a pension fund administrators launched this, what they call a financial education campaign, but was just one event without permanent activities. And the final price was a plane ticket to go and watch the Barcelona versus Real Madrid soccer game. And that's it. So that is not financial education that is a marketing campaign, because the people didn't get anything from that.
So what do you need? It has to define minimal requirement and minimum standard of having a financial education that goes through a period of time to allow people to learn about different aspects. And also we just introduce a new revelation for instance, to define these minimum standards in terms of consumer services that the pension fund administrator have to provide, but also orient that more in a give advice more than plain information. And the advice need to be not generic advice is, needs to be related to relevant variables like gender age and the milestone in pensions would be when you start contribution or the other one is when you retire. So I think that you can introduce all these, you can introduce these type of element in more in like a best practice type of message or in a space supervision. But I think that you need to orient them to do this and to move away from these marketing campaigns that sometimes they understand that is a financial education, but it's not a financial education report.
Demet Canakci:
Thank you, Olga. Very important point it is. Thank you very much. You mentioned perhaps we continue with you on this one. There's one question on online courses for children, since you mentioned that a couple of minutes ago, [Ureneta 00:59:23] is asking, online courses for children assumes parents have money to buy a computer that electricity is available and internet is good, is this not wishful thinking or putting countries that are majority of population is working in informal or rural sector? Any views on that?
Olga Fuentes:
Yeah.
William Price:
Olga you should go first there.
Olga Fuentes:
You can go first.
William Price:
No, you.
Olga Fuentes:
Yeah, and it's a very important point. So one example here in Chile, so we have these, rural, like towns in which also kids, they don't have technology at home, but if the government give subsidies to have that implementing in the school is something that you can do. And what you get is that to get the benefit of all these new educational information that is free, but wasn't available before. And you can do things like that. I understand that is a challenge. Sometimes rural areas, children has to walk for an hour or two to get to the school, but I think that you have a collaboration of also the government, the municipality, to be able to have a setting and a space for children to take advantage of this information.
Demet Canakci:
Thank you Olga, Will?
William Price:
Well, I would say whatever is working in the country is the thing to build on. So I agree if online, internet, use of computers is beyond people, which often will be, then there'll be a local group, it could be a church, the schools, as Olga says, it could be a self help group. It could be around, in Ghana where we were working, the cocoa farmers have a very strong infrastructure, whatever is there that is a sensible and trusted intermediary group, try something simple through them. And then again, let them be the gateway, but don't ask them to do too much. Don't even ask them to try and be finance professors, just enough to say, "This is a good thing, this is how it can help and then this is how to gain access."
Demet Canakci:
Thank you Will. We are running out of time. So I'll just ask you one last question from three submitted questions, it's more general. And then those of you who submitted questions earlier, thank you very much. In your view, are supervisors generally aware of and committed to integrating women's gender issues in financial education, in their supervisor of functions. Do you have specific suggestions for raising awareness of gender issues with supervisors? Will?
William Price:
I think it's probably right, that there are many supervisors who are not prioritizing the issue enough. Probably maybe it's data, but as we were saying at the beginning, the data is going to be horrible, whatever you do. So you could drive that route. I think my main one would be, if you're not a supervisor, come to them with a partnership and a solution to give them something very practical they can do, because supervisors tend to be more practically minded. Don't just sort of come with a problem, which they probably know, but I haven't prioritized, but it's, will you participate with us in this study with university X and group Y? Will you help change a particular regulation, which may be helpful? Something very practical and specific, which can take things forward.
Demet Canakci:
Thank you Will. Olga, would you like to? You have the last word.
Olga Fuentes:
Yeah, what have done in the last couple of year is to start publishing all the statistic, also desegregated by gender. And also we publish a couple of reports in which we are stress what is the effect of gender on the pension outcome. And we show the effect of their contribution densities, the effect of having lower income, higher longevity, and to see it in a explicit way what is the effect and what will be the actions that you can take to increase your pension. And actually, publishing the statistic by gender is a requirement of the government, because the government introduced a gender equality agenda. So we start doing this as on a voluntary basis, but now it's mandatory by the government. So I think that is a way of doing it. And also, like I said before to request and ask providers to make that recommendation and advice, and focus also on gender issues.
Demet Canakci:
Thank you, Olga. And thank you very much to both of you, for your time for joining us today and thank you for the participants being with us this morning or afternoon. And have a nice day, and keep safe, stay safe.
William Price:
Thanks so much.
Demet Canakci:
Bye-bye.
William Price:
And thanks for the great questions
Demet Canakci:
Bye.
Olga Fuentes:
Thank you very much.