Research shows many people are struggling to understand and access financial services

DETAILS of a new research report launched by Mairéad McGuinness, European Commissioner for Financial Services, Financial Stability, and Capital Markets Union, 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 to 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 causes 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.

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 Europe House, Dublin.

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.