The numerous events celebrated in Spain for the fourth Day of Financial Education and in Europe due to the World Saving Day gave us mixed sensations: we had started the race with big disadvantage and we progressed very much along the four years, but the world has changed much faster. In Spain we are late, we have not done enough.
We understood better the need to increase efforts to adapt ourselves to the evolution of education, information and their technologies and we also understood the importance of linking financial and digital education when we attended “ Día de la Educación financiera” 2019 and in Brussels the International Conference of World Saving Banks Institute and the European Saving Banks Group, and more events like Edufin Summit 2019. We also took note, around one month ago, that the Spanish Association of Economic Information Journalists (APIE) and the Spanish National Commission of the Share Market appreciated progress in transparency as well as certain economic information decay (due to politization, said APIE) and that they suggested additional changes in the statute book of good corporate governance. The first evaluations of the results of the first year of put in practice of Law 11/2018 are not quite satisfactory. This is a law, targeting no financial information and diversity, that obliges the companies to report the situation of no financial information in topics such as environment, labor, human rights, corruption, bribery and others, connected to the community where they run, including channels for external and internal complaints.
The first year of application in Spain of the tightening of the rules against conflict of interests in financial information of last European Directive on financial instruments (MIDIF II), chartered economist advisors only got two claims, and this is positive. But, still a big majority of claims go to banks and foreigners, and observing the statistics of claims set by clients of other kinds of banking activities, it looks like customers are aware that the banking system does not present enough independent services, which means that Directive PSD2 which make easier the connection between banks and fintech keeps going short. Spain is an European leader in fintech and crowdfunding … but only 17% of us know what they are about! A major responsibility of this fact is indicated by others previous statistics which showed that 84% of Spanish education centers do not impart knowledge about finance, in spite of the increase of the programs of our Centrak Bank and the CNMV, in collaboration with banks, insurances.The Ministry of Education for some years has been insisting in enhancing financial edication at school, and we hope that the new Government will stick to its engagement.
Training and information are imperative to shape and boost individual or collective rationale. The three undersigned put in common their efforts to defend this idea briskly, after attending to quoted events and collaborating with ADICAE, a consumer organization which organized seminars and lectures on financial education in the IES of Professional training “Clara del Rey”. One as MEP that promoted European educational initiatives, another as General Manager of APRI (International Relations Professional Association) which fight por more and better transparency, and the third as journalist and searcher/professor of Economic Structure. We share the view that we are facing at the same time two momentum never seen before in History with such an intensity:
1/ Exponential acceleration of interconnexions, boosted by new infrastructures of information. Since the moment when print interacted with double accounting system to offer transparency and rationality to information, 170 millions books have been wrote, a similar quantity of inhabitants of the planet 2020 years ago. Today we have more electronic devices to connect among us and with new things ( around 10000 millions) that people is on earth ( around 7500 millions).
2/ Digitalization has allowed finances, fintech and insurtech to be more democratic. But the expected avalanche of users scarcely trained demand better financial education, plus institutional commitments to transparency and ethics. This has to be put before the profit making, against the forecast revealed by recent studies and and lectures brought by Spanish searchers to the world academic literature. National supervisors, like Central Bank and CNMV, with their future sandbox (regulatory test bench), and CNMC and AEPD with their digital transformation ought to assure that any operative entity fulfill its obligations to protect users and investors, level playing field, independently of original premises. That should be done through mystery shopping or claim channels or monitoring committees.
To improve training and financial education and its deontological practices demand holistic and interdisciplinary implication; even transdiciplinary: Institutions, people and companies, topics, educational attainment, etc.. It demands to go further the gains obtained by last two plans of financial education undertaken by CNMV and Central Bank at schools. We need also seminars for spreading knowledge and improvements of the portal finanzasparatodos.es.
OECD demands ”ASAP” a financial education for all from cradle to grave, meanwhile UNICEF demands to educate in skills and emotions even to children from 0 to five, to show everyone the importance of money, prizes, savings, wealth and equally sustainable way of life. They will need to update almost every day to behave all life with full freedom to take proper financial decisions and to be able to operate eith financial products in a digital world.
Speaking about finances and digital, education and better information entail inclusion. That should motivate Markets Spanish supervisors, linked to the unstoppable innovation. Many studies prove that lack of financial education shortens, in first palace, opportunities, and after, resources and full emancipation of people. Some technologies present more exposure to “free” data traffic as big data, artificial intelligence, machine learning and so on. Others, like blockchain offer more transparency and possibilities to avoid conflict of interest, for instance with rating and scoring collaborative systems of financial products, and they could be well promoted by Spanish supervisors. Particularly central Banks will inevitably be obliged to cede competencies to the innovation world, as indicated by Katharina Pistor, author of “The capital code”, in a recent interview for the magazine “Consejeros”. Let’s hope that the statement , last summer, of CEOS and Chairmen of 181 of the biggest American companies, that assumed a compromise to put before shareholders profit the RSC of their companies, will lead also in the good way to improve good governance codes and watching of financial and no financial information quality of Spanish companies. In next year 2020 and following decade users and savers, in general, must be better prepared to assess this information and improve their rationale.
Facing fintech, insurtech and markets innovation, the idea we bring to get rid of conflict of interests through blockchain should not be neglected in this beginning of decade when the use of this accountancy tables could produce the good effects that the double accounting system have had for the capitalism dynamic: Some previous research of us on this idea have been accepted this year by the academic revue “Frontiers”, the fifth scientific magazine more quoted in the world.
But never forget that all technologies are like knifes or fire, They can be usted for good or bad. It is time to roll up our sleeves to grant the first and bar the second