Cordray explained that his bureau has seen countless examples of people who through accident and ignorance made their lives worse, sometimes immeasurably so, simply by making poor decisions with their money.
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The main feature of the summit was a two panel discussion that lasted the course of the entire morning. The first group included politicians and bankers from around the world, while financial journalists from equally diverse cultures sat on the second. Viewers of the summit’s webcast could submit questions to the panelists via Twitter, drawing user comments from the U.S. to Mongolia. It led to a discussion where the problems addressed ranged widely, as each participant brought the perspective of his or her own particular culture to the table.
“In Pakistan the unbanked adult population, without formal banking or services, constitutes 88%,” said Yaseen Anwar, Governor of the State Bank of Pakistan, citing an Asian Development Bank study finding that more than 2.8 billion people have no access to banking services around the world.
Linah Mohohlo, Governor to the Bank of Botswana raised a similar issue, saying that woman in particular suffer from a gap in access to banking and saving products.
“There are cultural areas that stand in the way of women exercising not only their financial know-how but also access to the basics of the financial and capitol markets, including banking,” she said. “[But] it’s not just cultural barriers and prejudices, it’s also legal.”
The concerns voiced by representatives from developing nations contrasted with those raised by panelists from developed countries such as Canada and Australia. While panelists from developing nations tended to focus on expanding access to basic financial structures such as saving and lending programs, panelists from developed nations focused on the misunderstanding of such assets once in place.
“People have to recognize that there are a number of small decisions that you can make all along the way such as putting money away,” said Camille Busette, Assistant Director of the Office of Financial Education. “That can have very large, life altering consequences.”
Panelists returned to the role of women in this process often, focusing on them as an often underserved population in the microeconomic sector.
“In terms of their savings ability they have a tendency to save because they look at the education and the livelihood of their children beyond a certain age,” Anwar said. “And, as mentioned by another speaker, women tend to outlive their husbands, and that is a very serious issue.”
The panelists brought up the word “conservative” often, citing that in their experience women tend to take fewer risks than men do when they’re allowed to control the money and understand their options. Chelminsky was even more direct, pulling no punches in her assessment that more women must be brought into the financial marketplace.
“The information and the studies that are being done are conclusive,” she said. “Women are better investors than men are.”
None of the panelists quite brought home the urgency of greater financial literacy more than Bernie Ripoll, Parliamentary Secretary to the Treasurer and Member of the Australian Parliament. While discussing efforts to help people better understand these issues, he described recent legislation by the Australian government regarding credit card debt. Every bill, he said, must now come with a small box printed at the top with four pieces of information: how much the borrower owes, the minimum payment on that debt, how long it will take to pay off the bill with that minimum payment and how much a person needs to pay per month to be debt free in a year.
“Instant financial literacy,” Ripoll said. “What we saw after that was introduced was that people who have a credit card balance of $5,000, they realized for the first time that if they only paid the minimum monthly balance it would take them more than 32 years to pay it off…It would take you the rest of your life, sometimes literally.”
Education was, in fact, the overall consensus of the event. Many of the panelists brought completely different experiences from their home countries and cultures; the problems faced by Mohohlo in Botswana just trying to get people into a bank were entirely different than those discussed by Alison Griffiths, a financial journalist from Canada who voiced her concerns communicating the nature and risks of mutual funds. Yet all of the panelists circled back consistently to the need for greater education, particularly among young people.
“[For an Egyptian woman,] most of your life you spend living at home with your parents,” said Amira Salah-Ahmed, a financial journalist from Egypt. “It's very traditional in that sense that you don’t move out of your parents’ home until you get married or until you’re in your late 20s, so you spend a lot of years picking up bad spending habits without having to bear the consequences of that.“
The rest of the panelists agreed with this sentiment. Much of the morning’s discussion circled around appropriate ways to integrate financial literacy programs into school curricula, allowing young people to begin learning how to manage their money before they need it. This theme was reflected on the tables in the conference hall which, among the pamphlets and programs, featured work intended to reach out to children, including an Avengers comic book by Marvel Comics and a football video game designed to teach financial concepts.
Cordray summed up this approach as he closed his keynote remarks. “Part of our job is to expose and eliminate the hidden pitfalls that can ruin their lives,” he said. “By reducing the complexity and expanding their capability we will close the gap between the financial world as it is and the financial world as it should be.”
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