Recent research and existing solutions are positively pointing out that apps and other interactive tools can play a relevant role in supporting better financial literacy levels.
Let us start from what is financial literacy and why is it so important? Lusardi and Mitchell define it as knowledge about a few but fundamental financial concepts, while the Organisation for Economic Co-operation and Development (OECD) says financial literacy also requires having the skills and motivation to make effective decisions. Studies in the topic of financial literacy suggests that people with financial knowledge are more likely to accumulate wealth because they are more likely to plan for retirement. Financial knowledge helps people to make informed decisions about spending and retirement.
A study published in 2015 by Lusardi supports the notion that interactive and online tools are having a positive impact. It found that novel educational programmes are “effective at increasing self-efficacy” and several of them contribute to improved financial literacy.
There are some examples that are using digital solutions to foster financial literacy. Apps and games are also changing the face of financial education by making it fun and accessible for a diverse audience. Moneyversity is an example of how videos, quizzes and interactive games are teaching people about compound interest, bond repayments and saving for retirement. Similarly, Capitec’s Livin’ It Up app is a strategic game in which the user has to balance daily expenses with aspirations of buying big-ticket items like a new home or car. Another example is PlayMoolah that guides an avatar through a range of real-life scenarios from buying a house and getting married to the mundane task of paying bills.