2022.11 The Taiwan Banker NO.155 / By Hank Huang (黃崇哲)
The lost lessons of the piggy bankEditor's Note
Once upon a time, children put the coins they got into a pig-shaped bank. In addition to feeling the satisfaction from the increasing weight, they also learned with each drop of the coin that it takes a bit of saving to realize one’s dreams. In the present cashless society, however, checkout no longer involves physical money, but rather electronic interfaces. Change has disappeared, and the most direct intuition about money is slowly disappearing. We can see that a lack of monetary intuition causes young people to live paycheck to paycheck. A serious gap exists in financial literacy between urban and rural areas, and between rich and poor. Many say that managing your finances is as important as managing your weight, but how do you start losing weight when you don’t even know your current measurements? Similarly, as the financial literacy gap widens, many young people are financially illiterate – even those with more education. How can we expect them to have the financial strength to pursue their dreams? Therefore, the first step for promotion of financial inclusion is an understanding of people’s financial height and weight – that is, their financial lives, resilience, and especially literacy. This is the intention of the Taiwan Financial Lives survey, which TABF has implemented since 2020. The 2022 survey results are cause for both celebration and reflection. The good news is that the government and the people are fighting the pandemic together, effectively driving an overall increase in wealth and risk resilience. The overall score improved compared to the early stage of the pandemic in 2020, and Taiwan is outstanding in international comparison. We also however found a worrying trend: the financially vulnerable and young people have not only failed to get on the train to prosperity, but also demonstrate worsening financial literacy, resulting in a widening gap between the rich and poor. Of course, it is not a problem when the rich become richer, but we cannot sit idly by and let the poor get poorer. We absolutely cannot accept the increasing wealth of the rich coming from decreased wealth of the poor. In ancient times, we could only rely on Robin Hood to narrow the gap between the rich and the poor, but in modern times, this is no longer so. Rather, helping the disadvantaged through effective financial literacy education would give everyone the opportunity to become financially independent and happy, naturally resolving the wealth gap. In particular, in an era of fintech and social media, as well as cross-border fraud and disinformation, financial literacy is the key to improving the financial situation of the disadvantaged. More concretely, we must consider changes in the financial sector and the development of fintech, and rebuild people’s intuitions about money so that they can master financial planning skills. In this regard, following continuous research, development and iteration, TABF has made some achievements and accumulated some experience in building education models to drive financial inclusion. We hope that this survey will provide the government with a reference for its financial inclusion policies. We also hope that society will integrate its care for the younger generation and the disadvantaged, transforming it into a robust financial literacy system so that the next generation will have a full piggy bank in order to better achieve its financial dreams.