Fin­an­cial edu­ca­tion is also about data lit­er­acy

Mar­tin Bjornberg is right to emphas­ise the role of fin­an­cial edu­ca­tion and fin­an­cial lit­er­acy in a thriv­ing eco­nomy and soci­ety (“Address fin­an­cial lit­er­acy and UK can be like Sweden”, Let­ters, May 3).

However, fin­an­cial edu­ca­tion and fin­an­cial lit­er­acy are now as much about digital and data lit­er­acy as under­stand­ing cal­cu­la­tions about money.

Advanced inform­a­tion tech­no­logy and the digit­isa­tion of our every­day life has trans­formed the way we inter­act and the way we trans­act. Fin­an­cial lit­er­acy and edu­ca­tion are there­fore now also about the pro­cess of decision-mak­ing and of under­stand­ing who and what we are inter­act­ing and trans­act­ing with.

Obvi­ously, the pub­lic also needs to still under­stand how to eval­u­ate the per­form­ance of invest­ment decisions.

Bill Gates’s 1994 quote that “bank­ing is neces­sary, but banks are not” is now widely seen as com­mon sense. That trans­form­a­tion high­lights the need for fin­an­cial edu­ca­tion to go bey­ond invest­ments and the mer­its and risks of vari­ous per­sonal credit options.

The cur­rent inquiry by the UK House of Com­mons edu­ca­tion select com­mit­tee must explore that wider con­text if it is to con­trib­ute to greater fin­an­cial lit­er­acy in future gen­er­a­tions.

The altern­at­ive is akin to a lan­guage school teach­ing Middle Eng­lish to stu­dents hop­ing to work in the Anglo­sphere.

Zsófia Kräussl
Senior Lec­turer in Fin­ance and Tech­no­logy
Bayes Busi­ness School
City, Uni­versity of Lon­don
Lon­don EC1, UK