Financial education plays a crucial role in empowering individuals to make informed decisions about their money and provides the foundation for understanding basic financial concepts such as budgeting, saving, investing, and debt management. By teaching individuals to effectively manage their finances, financial education can help them achieve their short-term goals, such as purchasing a home or paying off debts, as well as long-term goals, such as retirement planning.
While Spain has relatively low levels of financial literacy, significant progress has been made in digital transformation in recent years. While 49% of adults in Spain have basic financial knowledge – according to the latest OECD study on financial competencies – digital penetration in Spain reached 70% in 2022 compared to 52% in 2020, in line with the government’s efforts outlined in the Spain Digital 2026 Plan, according to a KPMG study. With this rapid advancement of technology and digital transformation, it is crucial for citizens to have a solid understanding of financial concepts and tools to navigate the digital landscape effectively.
Financial education, like any other type of training, can leverage new technologies to reach a much wider audience, adapt educational content to specific needs, utilize innovative pedagogical tools, and design efficient and effective surveys to verify the results obtained. Digitalization makes the educational challenge easier. But simultaneously, it becomes more complex.
Digital transformation enables personalized and interactive learning experiences. Financial education applications and platforms can collect data on each user’s financial habits and goals, offering personalized recommendations and insights. This tailored approach not only enhances individuals’ understanding of their own financial situation but also promotes engagement and motivation to learn. Gamification elements can also make financial education more effective, especially among younger audiences.
Although in-person classes remain important, Spanish financial institutions have also embraced digitalization to improve financial education, as evidenced by the sector’s approach through the Financial and Digital Classroom. This banking sector initiative, promoted by AEB, CECA, and UNACC, provides access on a website to content from various entities so that individuals can expand their financial knowledge and digital skills.
In any case, it is likely advisable to cultivate teaching methods that, in addition to boosting basic financial knowledge, aim to increase critical thinking, which helps facilitate well-informed decisions in both finance and any other field.
It is also important to recognize the potential risks and challenges that digital transformation entails for financial education. The abundance of information and resources available online can be overwhelming and confusing for individuals, especially those with limited financial knowledge. The increased ease of making payments, borrowing money, or investing savings offered by technology makes our lives easier but can also lead to hasty, imprudent, or uninformed decisions. Hence the need to increase customers’ ability to understand risks, evaluate the suitability of products for their particular needs, and, more generally, take advantage of the undisputed benefits of financial innovation. A benefit that extends to banking entities, which also benefit from having customers with basic financial knowledge and critical thinking that facilitates well-informed financial decisions.
Another increasingly frequent risk is that individuals fall victim to scams and fraudulent activities in the digital space, making it necessary to raise user awareness through cybersecurity campaigns.
Likewise, digitalization has an enormous capacity to integrate, but there are groups that may be at potential risk of exclusion, either because they lack basic knowledge or simply because they reject this access channel. It is therefore crucial that individuals receive guidance and support to navigate the digital landscape and distinguish reliable information sources from misleading ones. Furthermore, the risk of turning the digital, geographical, or generational divide into another source of financial exclusion must be avoided. To this end, the Spanish Banking Association (AEB), CECA, and the National Union of Credit Cooperatives (Unacc) have proposed a roadmap – beyond the training initiatives designed by each of the employers’ associations and their associates – to strengthen financial inclusion in rural areas, with the aim of ensuring adequate provision of in-person financial services for 100% of Spanish territory.
Digitalization and financial education in Spain have a bidirectional relationship. Financial education equips individuals with the knowledge and skills necessary to make informed decisions about their money, while digital transformation makes financial education more accessible, personalized, and engaging. Therefore, as Spain continues to advance in digital development, it is crucial for individuals to understand financial concepts and tools and to effectively navigate the digital landscape, a dual objective that has the dedication and full commitment of financial institutions.
Juan Carlos Delrieu, Director of Sustainability and Corporate Social Responsibility at the Spanish Banking Association
