As a gift to Taiwan, the Taiwan Academy of Banking and Finance, which turns 40 this year, has published the country’s first Taiwan Financial Life Survey.

Based on over 22,000 questionnaires, the survey details the experiences of Taiwanese people in income, expenditure, savings, lending, and insurance. In contrast to other household income and expenditure surveys such as those conducted by the General Accounting Office, this survey focuses on uncovering financial weaknesses, aiming to give the financially vulnerable the opportunity to improve their lives.

As in other countries, the widening wealth gap and disappearance of the middle class have become major challenges for Taiwan. The survey indeed showed a bimodal distribution in saving and borrowing. About 30% of people have good savings and investment, but another 30% have less than NT$ 50,000 in the bank, or even no savings. Most worryingly, about 16% recognize their cash flows are problematic or very problematic, and nearly 20% wouldn’t be able to raise NT$ 100,000 within a week. In case of emergency, these people would have to rely upon underground lending. The survey shows that in a world with a widening wealth gap, it’s not just the 3% of low- and mid-t0-low-income households as defined by the government who are financially vulnerable, but also moonlighters, the working poor, and many others who struggle to make ends meet.

The report uses Australia as an international comparison. Taiwanese people have fewer borrowing resources, less insurance coverage, and less understanding of financial products than their overseas counterparts, so these are weak points in Taiwan’s financial resilience. Continued education to foster financial literacy would be helpful, but even more useful would be appropriate policies to give more of the financially vulnerable a stronger ability to more confidently use financial services.

This is a direction that financial inclusion policies can work towards. If wealth management can target the financially disadvantaged rather than rich savers, financial institutions can use education, financial assistance, and advisory services to provide services for a broader customer base. Trusts 2.0 and micro-insurance represent the significance and value of financial inclusion Thomas Huang, Chair of the FSC, has advocated for their transformation. This will give the vulnerable the opportunity to gradually improve their finances, strengthen their resilience to future economic and financial risk, and prevent the wealth gap from widening further – all of which are important issues for social stability and development. Governments at all levels should pay close attention to this topic and research policy options.

The finance industry has always regarded the middle class as its customer base, and a large middle class is the foundation of sustainable development. If it disappears, it will be difficult for capital providers to find trustworthy and financially stable borrowers to support the system, and society as a whole will be less stable. Therefore, it will be critical for the financial industry to develop services with ESG awareness, in search of a society in which the ‘haves’ can link together with the ‘have-nots.’ Through this survey, we have learned about the diversity of Taiwan’s financial ecosystem, and found that there’s still much room for growth. I hope the industry can come together to jointly build a better society.