Innovations in the field of finance have led to a surge in financial products and derivatives in most of the economy worldwide. The qualitative part of financial innovation requires the transformation of financial education through the medium of emerging technology and digital means. Financial education targeting the marginal group of people through digital tools has come to known as "Digital Financial Literacy". With these methods, mass people will be enabled in managing their financial transactions and get protected from financial frauds committed digitally. Alliance for Financial Inclusion (AFI) expressed the Digital Financial Literacy (DFL) into 4 dimensions, such as-- attaining knowledge, skills, confidence, and competencies that direct to use digitally delivered financial products and services, and additionally to take cognizant financial decisions. The research on digital financial literacy nowadays is delving into the measurement of impulsive purchasing behaviour of financial products and services.
Bangladesh is a country of more than 170 millions of people and according to BTRC, 119.06 million uses mobile internet as of November, 2024. Internet is being used not only through the medium of mobile phone, but also through WiFi covering the wide range of accessibility. The financial education has been made available through internet from COVID-19 era in the early 2020. Furthermore, Bangladesh has also embarked on the initiative for cashless society with the increasing trend of digital payment mechanism such as payment through online, card, mobile banking etc. To lead Bangladesh towards a financial inclusive economy, banks have been delivering financial education to the unserved and underserved people such as farmers, students, women entrepreneurs, small businessmen, micro entrepreneurs, migrant workers, youths, wage earners communities, teachers, business associations, co-operative societies and others with the cooperation of Bangladesh Bank and other stakeholders such as SME Foundation, Bangladesh Small and Cottage Industries Corporation (BSCIC), Upazila/Thana Livestock officers, Agricultural officers and Fisheries officers etc.
Financial Literacy is being offered on five dimensions of human behaviour such as earning, spending, saving-investing, borrowing and finally protecting. Moreover, financial literacy is required for smooth balancing of financial life not only limited to individuals, but also enterprises. The ultimate backbone of businesses knowingly Micro, Small and Medium Enterprises (MSMEs) are also the beneficiaries of financial education. The necessity of awareness on how to search for market opportunity, how to increase earning efficiency, how to borrow money from financial institutions, where to inject additional capital, how to get return, how to transact sales, how to make payment to the suppliers, where to protect the day-end balance and how to protect themselves from financial frauds etc. are the learning module of financial literacy for MSMEs in a nutshell.
Financial Literacy can be provided through physical presence as well as digital platforms. A study on Financial Literacy in Bangladesh: A Gender-Specific analysis of the National Status conducted by Innovation Consulting Private Limited with the cooperation of our National Innovation Agency called Aspire to Innovate (a2i)and United Nations Development Programme (UNDP) revealed that women and disadvantaged communities in Bangladesh requires the financial literacy for which they emphasised more on product development, institutional awareness building, policy infrastructure development for small credit facilities based on Digital Financial Service (DFS) platform for financial inclusion. There are a lot of people in the rural area who are still unaccustomed with the basic concepts of financial literacy that led the rural segments to be isolated from other communities in the era of digital financial services.
Digital Financial Literacy (DFL) is an advanced platform of Financial Literacy that deals with digital financial knowledge, awareness on digital financial services, know-how to use digital tools etc. According to World Bank, digital financial inclusion is the involvement of deploying the cost-saving digital means to reach financially excluded and underserved populations with a range of formal financial services considering their needs that are responsibly delivered at affordable cost to customers and also being treated as sustainable for service providers. Aiming at the specific needs of migrant workers and their families, particularly women, United Nations Capital Development Fund (UNCDF)is encouraging different private institutions such as financial institutions, Fintech companies, microfinance institutions, payment service operators etc., to design innovative Digital Financial Literacy (DFL) solutions for which a competitive grant will be offered to the selected organisation(s) for development, implementation, and monitoring of the same.10 Minutes School and bKash have jointly taken edges to promote Digital Financial Literacy in Bangladesh offering different programmes on personal finance, budget management and tracking, awareness of financial fraud, setting and achieving financial goals etc. These initiatives are enlarging the scope of financial literacy development in rural economy day by day.
The world is moving towards technological invention in every sphere of life, the outcome of which generated digital banks, digital financial services, digital payments, cashless transactions, digital insurance, credit scoring based borrower analysis, digital money, digital lending, application of Artificial Intelligence (AI) in customer services etc. The necessity of DFL has now become exigent for all the mankind because of its potential and prompt accessibility to the marginal individuals as well as MSMEs. Digital information and insights of DFL can help know the digital financial practices all over the world. Its area is not limited to the accessibility of digital information only, but also pinned into easy documentation, customer interaction over the boundary, support teams of enterprises, personal financial management etc. that comes up with a best uses of technology for a better world.
Sanjoy Pal is Head of Financial Literacy Wing of a commercial bank and certified Financial Modeling & Valuation Analyst (FMVA®).
pal.sanjoy25@gmail.com
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