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Conference in Dubai, Raffles the palm
Conference in Dubai, Raffles the palm Vadim Ivanov

Financial empowerment has always been a critical aspect to promote innovation in the space. But now, with a new wave of financial possibilities opening up -fuelled by new decentralization options, digital assets, NFTs, globalization and more-, the need is even greater. In this regard, financial literacy plays a key role in empowerment, especially in the context of children, who, traditionally, have been overlooked in this area. But what does it mean exactly? Vadim Mashurov, a tech entrepreneur and founder of Instime, a revolutionary social media marketing start-up, explains.

Empowerment is not about making large amounts of money, but rather about being in control of one’s finances, thus, in that way, alleviating some of the stresses that come as a natural part of one’s financial journey. These skills should be taught from a young age, in order to prepare future generations for financial success, rather than setting them up for failure.

In most cases, financial literacy is not taught at school. Math, physics, and other science subjects may prepare a child for their future endeavors in higher education, but do not teach them practical skills, such as budgeting or investing. Consequently, young people, and then young adults, do not have the tools to put those teachings into practice. As per a 2015 PISA Study, 22% of teens lack a foundation in basic financial skills. Likewise, according to a 2021 Greenlight study, 74% of teens do not feel comfortable with the level of their financial education. Moreover, 34% of teens do not even know the difference between a credit and a debit card. This is why, in my next venture, I want to give young people a head-start, the ability to take care of their financial futures early, opening the doors to financial empowerment. My aim is to create an international financial ecosystem, the purpose of which would be to help the financial literacy of young children, from the age of seven.

While a variety of different theories of change to economic empowerment exist, according to CGAP (Consultative Group to Assist the Poor), most of them involve three broad elements: access to income and assets, control of and benefit from economic gains, and the power to make decisions. Below are just some examples of what the move to empowerment in this area could look like:

Providing digital access and data.

The digital economy is growing and slowly becoming something that all of us must embrace in order to live prosperous lives. This is why children need to be able to make and receive payments digitally. Most debit cards currently are available to individuals aged 16, or even younger. What is necessary, is phone access, an online account, and a cash-in cash-out (CICO) network. According to CGAP, lower- and middle-income countries, phone access and ownership is still scarce, which is something that must be addressed in the upcoming years.

Teaching through play.

Children learn best through play. According to a survey by the Bank of England, only a quarter (27%) of children in the UK enjoy learning about money at school. A new initiative by the Bank of England, called “Money and Me” is aiming to address that problem. Money and Me features cartoon characters Dennis the Menace, Minnie the Minx and the Beano gang who teach financial literacy in 12 step-by-step lessons, with presentations, activities, and games. Topics covered include: “What is Money?, Managing My Money, Ethical Spending and What is Debt?”.

The initiative was launched by Andrew Bailey, Governor of the Bank of England, who explained that: “The current economic situation has demonstrated the importance of financial education. However, this research shows how much further we have to go to embed it into the lives of young people. Our Money and Me resource, developed in conjunction with Beano and Tes Global, will help to fill that gap and support primary school teachers to engage pupils in these vital issues from an early age”.

Budgeting and investing.

Children learn best through play indeed, but they also need the venue to put the skills learned into practice. Budgeting and investing simulations are most helpful in this regard. Just recently, the bank HSBC launched a page with tools enabling children to learn budgeting in practice; the game is called “The Expedition” and it features a trip to the Antarctic, for which the child must decide what to purchase, whilst working on a budget, thinking carefully about how to spend their money. The same is true of trading simulators, which are virtual environments where children (and also adults!) can learn trading in a risk-free, stress-free way. One example is the Stock Market Game, supported by the Securities Industry and Financial Markets Association (SIFMA) Foundation, where students get to manage $100,000 in online money.

All in all, we still lack a proper framework for making financial empowerment widespread and accessible and not only directed at adults. Although some steps have been made, with the introduction of various initiatives such as the one by the Bank of England, the room for improvement remains. Positive financial tools such as saving, the dangers of debt, and investing should be taught from a young age, so as to give a head-start to the future adults embarking on their career journey. Only that way, can we make the world a more equal, safe, and fair place.