In its July 2023 “lettre de l’observatoire de l’épargne“, the AMF (Financial Markets Authority in France) notes a rejuvenation of equity investors, initiated during the Covid 19 crisis.

While half of all shareholders are still over 55, the proportion of young shareholders (under 35) has risen from 7.6% in 2018 to almost 20% in the first half of 2023. The overall rate of equity investors, meanwhile, has remained stable at around 6%. At the same time, the shareholding rate of the over-45s has fallen.

Almost 40% of new equity investors are under 35. Even more surprisingly, the under-25s hold more shares than the 25-35s. The under-25s will hold 11.2% in 2023, compared with 8.1% for the 25-35s!

These data come from daily transaction reports sent to the AMF. These are the mandatory MiFIDII reports sent by investment service providers.

Increasingly responsible investors…

While interest in responsible investment remains moderate among the French population, it is high among young investors. Since 2022, they have accounted for half of all new subscribers to sustainable financial products, according to a study carried out by Opinionway for the Autorité des marchés financiers (AMF).

According to the AMF letter, 58% of under-35s are interested in sustainable finance. More of them (42%) have a good image of it than the over-65s (24%), and plan to invest part of their savings in it in the short or medium term (44%, versus 15%). Half of all new investors in responsible funds are under 35. This interest seems even more pronounced among young women.

These results are in line with a Neuroprofiler 2022 study. It shows that 80% of people under 40 want to have an impact through their investments. By contrast, the figure is only 60% for older people.

The need for better financial education for young people

Young French people’s new enthusiasm for equity investing and sustainable finance is good news for economic development and social and environmental protection. However, it must be accompanied by appropriate financial education!

Indeed, the excesses of certain trading applications aimed at a young audience. One example that quickly springs to mind is the Robinhood app in the USA.

The latter has been criticized for encouraging excessive speculation. In particular, the use of gamification elements such as confetti animations when executing an order. The gamified practices of the app and the possibility of having a large overdraft on the app were even blamed in 2020 for the suicide of a 20-year-old trader. He had incurred over $700,000 in debt on the app.

Meanwhile, financial authorities are constantly raising the alarm about online scams and fake sites. They promise enticing investments, including sustainable ones, and young investors are particularly hard hit.

France lags behind in financial education

To avoid these abuses, good financial education remains essential. Yet France is far from a model in this respect. According to the 2016 Allianz study “Money, financial culture and risk in the digital age”, France ranks last in financial culture out of 10 European countries, behind Portugal and Italy. On the other hand, Austria, Germany and Switzerland top the ranking.

Just under half of French respondents were able to answer questions on inflation and interest rates. The study also shows that the Millenials generation (born in the 1980s and 1990s) has the lowest level of financial literacy.

According to the July 2023 AMF letter, the lack of financial education also concerns sustainable investment topics. Individuals, including young people, feel they have too little knowledge on the subject to judge the true sustainability of the investments they are offered.

Aware of these limitations, in 2023 the French market authority stressed the importance of financial education for young people. It emphasized its desire to multiply initiatives on the subject.

“This new generation of retail investors is an asset for the Paris financial center,” says AMF Chairman Marie-Anne Barbat-Layani. “The AMF will continue its educational initiatives to help shareholders, especially novices of all ages, acquire a stock market culture with a long-term perspective.

Influencing young people in the right direction…

In March 2023, with an accessible style and modern aesthetic, the AMF published a guide to employee savings. This partnership with Les clés de la finance aims to encourage young people to save for retirement.

The AMF and ARPP are launching the Responsible Influence in Finance certificate in September 2023. Generation Z young people (under 25) have become very sensitive to influencers. Particularly on the social networks TikTok, YouTube or Instagram. According to a 2023 AMF analysis, 11% of investors today get their information from influencers on social networks, most of whom are under 25. According to a 2022 Neuroprofiler survey, the new Generation Z would even trust influencers more than bankers!

Yet, despite their aura, their financial education often remains limited. They therefore represent both a real opportunity to educate young investors… but also a real risk if the information transmitted is erroneous.

The AMF certificate of responsible influence in finance

Aware of this problem, the AMF hopes to professionalize this activity and protect young investors with this “certificate of responsible influence in finance“. To date, this certificate has been awarded to almost 1,000 French influencers.

The course covers investment products, different types of services and financial providers. The two authorities also detail the rules to be respected when communicating about an investment offer, specifying the products and services whose advertising is prohibited. A minimum of 75% correct answers to 25 multiple-choice questions are required to validate this certificate.

An alternative approach to effectively educating the younger generation about finance, as yet little exploited by financial regulators, is that of gamification. Indeed, this technique can also facilitate learning if used wisely.

Numerous publications, including from regulators such as Consob in Italy, have demonstrated the effectiveness of this learning method for financial subjects.

These studies show that gamification enables long-term memorization of financial principles. In particular, by encouraging young investors to return regularly to a learning platform. Rewards, surprise effects and micro-learning are just some of the ways in which gamification stimulates engagement.

An effective approach to educating young investors… and their influencers!

L’article Younger equity investors and financial education: a priority for the AMF est apparu en premier sur Neuroprofiler.

Financial literacy program examples initiated by governments

Here are several examples of financial literacy programs initiated by governments :

Incorporate Financial Education in Schools

Some countries, like Germany, have included financial literacy education as part of the school curriculum, teaching students basic concepts like budgeting, saving, investing, and understanding financial products. 

Provide Adult Financial Education

Some governments offer workshops, seminars, and webinars on topics such as budgeting, debt management, retirement planning, and investment to their citizens. For instance, Banque de France has created a museum in Paris called Citeco where everyone can learn more about economics and finance.

Online Resources

Some governments have created education websites, sometimes in partnership with associations, to provide resources, tools, and interactive modules to help individuals learn about personal finance. For instance, La finance pour tous is a French website supported by the French government.

Collaborate with Financial Institutions:

Some governments can partner with Banks and Credit Unions to share education resources to their retail clients.

Consumer Protection Regulations

Financial regulations can promote financial literacy to better protect consumers. For instance, in Europe, under the MIFIDII regulation, it is compulsory to assess the client’s financial knowledge before recommending financial products to him. Financial advisors are also required to meet certain education and ethical standards.

Promoting retirement savings programs like pension plans or retirement savings accounts

This is the case of the PEE and PER in France which are investment programs with an advantageous taxation for long-time savings.

 Financial Inclusion Initiatives

Some governments develop initiatives to ensure that all segments of the population have access to financial services and understand how to use them effectively. This most of the time done at the local level, in partnership with local social associations.

Research and Assessment:

Finally, most governments have a research department to constantly follow the evolution of research and statistics regarding financial education.

The benefits of fostering a financially educated population

Fostering a financially educated society can yield numerous benefits that positively impact individuals, communities, and economies. Here are its main five:

1. Reducing financial stress: Financial stress is a common issue that can negatively affect mental and physical health. By providing individuals with the knowledge to manage their finances effectively, financial education helps reduce anxiety and stress related to money matters. Actually, this lack of stress leads us to the next benefit:
2. Boosting self-confidence: When people understand financial concepts, they feel more confident in managing their finances, making investments, and planning for their future. This empowerment leads to better financial choices and a greater feeling of well-being.
3. Wealth accumulation: Individuals who are financially literate are more likely to save and invest wisely, which can lead to increased wealth over time. This, in turn, can help break the cycle of poverty and promote social mobility.
4. Responsible consumer behavior: Financially educated consumers are better prepared to make smart purchasing decisions. An accurate understanding of how classic economic model works may raise their awareness of the importance of responsible consumption and guide them towards more sustainable habits.
5. Strengthened economy: Financial education results in increased financial stability. Mainly for individuals and families, reducing the burden on social safety nets. Moreover, financially educated individuals are more likely to contribute to retirement plans and investments, leading to a stronger overall economy.

Conclusion

Governments efforts in improving financial literacy are important for fostering a financially capable and empowered population. By implementing a combination of educational programs, resources, regulations, and public awareness campaigns, governments can equip individuals with the knowledge and skills needed to make informed financial decisions and navigate the complexities of personal finance.

L’article The role of governments in improving financial literacy est apparu en premier sur Neuroprofiler.

The long-awaited legislative proposal for the Retail Investment Strategy (RIS) was published by the European Commission (EC) on May 24, 2023. This is a major proposal with far-reaching consequences, as it amends no less than 5 fundamental texts [1] relating to this world of retail investment.

The Commission presents this project as a major initiative to improve the framework and protection of retail investors. It also aims to strengthen their confidence and participation in the financial markets. In this way, they can contribute to the success of the Capital Markets Union project on which the EC has been working for years.

Numerous proposals

The EC’s draft legislation contains numerous points, which we will return to in subsequent articles.

It does not include a general ban on kickbacks, as many financial players feared. It does, however, propose a whole system based on the concept of Value For Money, which could have far-reaching consequences for the world of asset management.

The major disappointment, however, lies in the lack of ambition when it comes to financial education.

Financial education: a major absentee in the Retail Investment Strategy (RIS) proposal

Despite numerous statements on the subject, the European Commission’s legislative proposal for a Strategy for Retail Investment (RIS) does not include any major proposals on financial education.

In the context of the amendments to MiFID [2], the proposal says only two things. Firstly, Member States must promote financial education. Secondly, it succinctly differentiates between financial education and marketing material. The same applies to the IDD [3].

So, nothing very concrete or impactful.

A missed opportunity

It’s a pity that in a text presented as so fundamental and structuring, the European Commission accords so little importance to this theme.

How can we increase retail investor participation in the financial markets without increasing their understanding of them?

Studies on the lack of financial literacy among the French are regularly published. Without sufficient financial knowledge, how can you invest in the right conditions? How can we even understand the importance and stakes of financial savings in the life of an individual? Whether it’s financing your children’s education or preparing for your retirement.

Some might say that financial intermediaries are there to help organize these savings. But in its proposal, the European Commission itself cites a study [4] which shows that only 38% of those questioned consider that the investment advice they receive is really in their interests.

Yet the stakes are so high. On the one hand, the funded pension system is facing a major financial challenge. On the other, the financial challenges posed by the climate transition are considerable, and will require increased investment capacity that would be impossible to muster without the mobilization of individual investors.

This mobilization can have a real impact. In February and March respectively, the French opened 600,000 and 400,000 popular savings passbooks (Livrets d’Épargne Populaire).

A role for Europe?

Of course, levels of financial literacy differ from one European country to another. So do educational systems. What works in one country may not work in another.

Yet the ageing population and the climate challenge are indeed European challenges. The need to know the importance of financial savings and how financial products work applies to all Europeans.

Against this backdrop, it would be a good thing if Europe were to take a firmer hold of this issue. Rather than a system of benchmark prices for investment funds, which bears an unfortunate resemblance to price controls, why not impose a system of compulsory contributions by European financial establishments to real initiatives that have an impact on the financial education of European citizens?

In any case, at Neuroprofiler, we’ve started to take up the challenge of financial education with our fun course called EduProfiler.

Sources :

1. Omnibus proposition 230524-proposal-omnibus-directive_en.pdf (europa.eu)
2. MiFID II 32014L0065 – EN – EUR-Lex – European Union
3. IDD  32016L0097 – EN – EUR-Lex – European Union
4. Eurobarometer survey monitoring the level of financial literacy in the EU, 2023. The relevant question is Q12. “How confident are you that investment advice you receive from your bank/insurer/financial advisor is primarily in your best interest?”.

L’article The EU Retail Investment Strategy (RIS) is here est apparu en premier sur Neuroprofiler.

What is financial literacy?

Financial education, according to the OECD, is defined as:

• Understanding financial concepts and risks
• Developing skills and confidence in financial matters
• To make informed financial decisions

This enables learners to better understand the financial world, and thus to stop being afraid to invest.

Europeans’ lack of financial knowledge affects their investment decisions

In Europe, financial literacy remains low and reflects social inequalities in education, family background, financial resources and gender.

49% of 18-20 year olds have not been taught about financial concepts during their schooling and 73% about budgeting and personal finance.

3 out of 4 French people feel they lack financial knowledge and 60% say they are not able to choose or discuss a financial product.

69% of French people consider their knowledge to be rather insufficient, or even weak, concerning financial matters.

According to a 2021 study by the association Possible Finance, 70% of adults do not master the basic concepts of finance. This figure can even reach 75% for the Millenials generation.

The results of a CREDOC survey on the financial culture of the French reinforce this observation:

Only one person out of two knows that €100 invested at 2% per year leads to a capital of €102 after one year

One person out of four manages to find the definition of a bond in a list of three possible answers

Only 45% know what a mutual fund is and 52% know the principle of a dividend

Lack of financial literacy, a factor in inequality

Lack of financial literacy also increases inequality

According to a study by the American University of Minnesota, financial education is very unequal according to financial resources, gender and level of education.

According to this study, women have a knowledge score that is 10% lower than men. In addition, an investor with a university degree is 30% more likely than a high school graduate.

If this study was carried out on an American population, we can assume that the influence of these demographic elements affects European savers in a similar way.

L’article Lack of financial literacy in Europe leads to inequality est apparu en premier sur Neuroprofiler.

Gamification is an innovative idea that consists in applying game mechanisms to other domains (websites, applications, social networks, etc.).

Gamification can help companies better train new employees or retain their customers. It allows to present the “problems” encountered under a lighter and interactive aspect. There is also the example of Duolingo, which learns languages thanks to this same principle.

This creates a strong community with common goals and purpose.

What is the gamification strategy?

The gamification strategy is to present its website and its services in a playful way, in a more interactive form, inspired by the principle of video games (games, challenges, quizzes, …). Gamification is now used in many sectors (sports, finance, HR…).

What is the added value of gamification in the financial sector?

Gamification can allow financial institutions to educate their customers and make them want to invest. It allows to democratize the world of finance, sometimes perceived as complex and inaccessible for many individuals. More informed, customers invest more and in more complex products.

This innovative idea of gamification also allows to build customer loyalty at a lower cost. For example, introducing a points system for the acquisition of a financial product or rewards if the customer becomes educated will encourage them to invest.

Remember that retaining a customer is seven times less expensive than acquiring one.

What is the added value of gamification in the HR sector?

Gamification can also be applied in the HR field (recruitment, training, building a corporate culture…). Through reward systems, the learning process of employees is improved. Gamification can be a real springboard to achieve business objectives, especially with customers.

How is gamification used at Neuroprofiler?

Neuroprofiler integrates gamification in these 2 products: InvestProfiler and EduProfiler.

These fun modules allow us to analyze the interests and types of investments that the client prefers and thus guide them towards the type of investment that best suits them.

Thanks to gamification, Neuroprofiler allows you to increase your clients’ loyalty, put forward 10% more risk-averse profiles and increase your clients’ outstanding amounts by 10%. In fact, according to our studies, 80% of investors prefer our gamified questionnaire (InvestProfiler) vs. a standard questionnaire.

L’article Gamification and its challenges est apparu en premier sur Neuroprofiler.

The initiatives at issue are those carried out by National Competent Authorities (NCAs) (such as the AMF in France) in the area of financial education and digitalisation. 

Unsurprisingly, the ESAs find that lack of financial education and lack of familiarity with digital practices are the main reasons why some people fall victim to fraud or scams.

A total of 127 initiatives were reviewed, which underlines the significant and long-standing effort of these NCAs in this area. Perhaps more surprisingly, only 13% of these initiatives targeted investors, customers of banks or insurers. 

Moreover, only 8% of the initiatives were organized with private sector actors. Paradoxically, these few initiatives would result in a higher audience, which the ESAs welcome.

The relevance of gamification in educational inititives

The report highlights the relevance of using gamification and “edutainment” to better address certain segments of the population. It also points out that this is not done enough in current initiatives.  

The financial education solution developed by Neuroprofiler has adopted this recommendation since its creation. EduProfiler aims to be both didactic and highly entertaining in order to provide an excellent user experience on financial topics that are often dry and not very engaging. 

The need for a differentiated approach

Finally, the report establishes the need to have a targeted and differentiated approach according to the target users. This principle is again at the heart of the ongoing development of EDUprofiler in order to offer versions of the financial education pathway that suit better to the needs of different users.

Financial education is more than ever a strategic issue. Greater participation by individual investors, which is more necessary than ever, will undoubtedly require greater education. It would seem that the European Commission is giving this a special place in its “Retail Investment” legislative project. Incidentally, it should be published in April 2023.

The full list of 12 recommendations

• Promote the inclusion of certain population segments which are not keen on technology. 
• Work closely with teachers to understand their specific educational needs as well as develop adequate teaching support. 
• Warn about scams and fraud in an accessible and timely manner. For instance, through the publication of a blacklist of fraudulent providers.
• When publishing a list of authorized financial entities, avoid giving the impression that the NCA endorses their offerings.
• Inform young consumers about the financial risks of new technology-based financial products and services.
• Include – where appropriate – fun and entertaining elements in financial education campaigns. For example through gamification.
• Increase the credibility of the initiative by making the NCA a trusted brand providing useful advice and clear information to achieve a wider scope of the initiative. 
• When cooperating with other institutions, ensure commitment to the initiative at the highest level of the partner organization.
• Achieve good searchability of the initiative’s website so that it appears as one of the first search results in a search engine.
• Be aware of follow-up costs when developing an initiative to avoid wasting resources. 
• Measure not only the attention an initiative generates, but also improvements in financial literacy.
• Apply a targeted approach to measuring the effectiveness of a financial literacy initiative. For example, by conducting focus group tests and ideally evaluating their evolution over time.

In conclusion of this review of financial education initiatives, once again the EduProfiler is proving to be relevant to the needs of the financial sector. Indeed, this financial education module for clients or prospects of banks and life insurers seems both relevant and original in this context. 
Do not hesitate to contact us in order to learn more about the solution.

L’article European Authorities’ recommendations for financial education est apparu en premier sur Neuroprofiler.

The following is a summary of the main findings of this study.

Features

The majority of respondents expect a financial literacy tool to be reliable and clear. 40% expect it to be fast, with the possibility of learning through simulations. Finally, 20% want the tool to be intuitive, ethical and fun.

Format

As for the format, the majority of respondents prefer infographics and video, while articles or games are preferred.

The gamification of financial literacy is thus emerging as a major trend among this new generation of investors, who want to learn quickly and effortlessly.

Neuroprofiler conducted a second study on the expectations of Gen X, Y and Z investors regarding gamification.

For more than 70% of the respondents, gamification must allow them to have a user experience aligned with their values, while being a way to surpass themselves, even to take risks for 60% of them.

In short, new investors want to learn about reliable, ethical and intuitive digital applications that allow them to quickly master key financial concepts, via infographics, articles but also video and games.

The financial literacy tools currently available, however, seem inadequate to meet these expectations.

Unsuitable tools

Neuroprofiler’s study on financial literacy also shows that the majority of respondents have already taken financial training, either on their own or during their academic career. A majority of them have taken financial education on the internet through MOOCs or online courses.

Only 6% of respondents claim to have used a financial literacy application.

Yet 70% of them are dissatisfied with the financial literacy tools available to them.

To meet these new needs, financial literacy platforms are beginning to emerge.

Zogo, an American application inspired by Duolingo, proposes to train Gen Z in budget management and to pay them via vouchers according to their progress!

Invesmate, an application backed by Capital.com, offers a fun way to learn about trading.

With a real community spirit, it allows to follow, “like” and exchange with profiled users with “credibility” scores, in the same way as on social networks.

However, these applications remain rare and are often geared more towards budget education than investment education.

It is in this context that Neuroprofiler, with its experience in cognitive sciences, finance and gamification, has created an EduProfiler, a playful financial literacy platform for individuals. Rewards, challenges, puzzles … gamification is at the heart of the EduProfiler’s learning mechanisms. The choice of gamification aims not only to motivate young investors to take an interest in finance, but also to enable better learning, in line with the theories neuro-educational.

L’article Investors’ expectations for financial literacy est apparu en premier sur Neuroprofiler.

The notion of learning through play is not new. It emerged in the academic literature in the 1980s with the work of Cotta (1980) and Malone (1981).

The term “gamification” was coined in 2002 by Nick Pelling, a game designer who was given the task of gamifying ATM interfaces.

For a decade, gamification attempts will multiply. In 2005, the company Bunchball was created, a SaaS platform offering on-demand gamification services to promote customer and employee engagement and loyalty.

For example, the company was hired in 2007 to develop a gamified sales platform for the American TV series “The Office”. Two years later, a website called “Chores Wars” encourages individuals to complete their household chores through gaming. This is the first time gamification has entered the American home.

In order to study this new sociological phenomenon more closely, academic studies on gamification began to multiply in the 2010s.

What Is Gamification?

Several definitions of gamification can be identified in the international literature.

Deterding et al. (2011) define it as “the use of game design elements in non-game contexts”.

Gamification is for example used by companies to better train their new employees or to build customer loyalty. It allows to present the problems encountered under a lighter and interactive aspect.

There are a wide variety of academic models that propose a list of levers to make an application gamified.

Starting from different approaches and experiments, these studies converge to a large extent on the same elements (collection, rarity, quest, trophy, social pressure, competition, avatar, surprise, freedom to act, teamwork).

Faced with this multiplicity of approaches, Neuroprofiler has chosen to base itself on one of the most recognized and studied in the academic world: the Octalysis model.

Description of the Octalysis model

The Octalysis model, created by Yu-kai Chou, identifies the following 8 main gamification levers:

• Vocation and sense of epic: allows the user to feel privileged and unique.
• Empowerment: allows the user to feel autonomous and responsible for his journey. The user is the master of his game, which he can shape according to his values and vision. They are engaged in a creative process.
• Social influence: will promote mentoring, collaboration, but also competition.
• Unpredictability: consists in keeping the user’s attention constant through new elements, suspense and unexpected events.
• Prevention: consists in playing with the loss aversion of the users.
• Rarity: consists in valuing knowledge or an action by its rarity.
• Possession: increases user motivation through the possession of new objects or knowledge.
• Accomplishment: is based on the users’ desire to excel and acquire new knowledge.

EDUprofiler Uses the Gamification Levers of the Octalysis Model:

Vocation and Sense of Epic

In response to the enthusiasm of the new generation of investors for sustainable investment, EDUprofiler immerses the user in the world of the Canadian rainforest from the very first screens. The lessons follow one another, forming a path through vegetation that becomes more and more lush as they progress and validate their lessons.

Through the different lessons, the user understands what concrete impact he can have with his investment.

Empowerment

The investor is in total autonomy and completely free on the platform. He can choose the financial products he wants to learn about, and stop at any time. Each module lasts from 5 to 10 minutes, with the possibility of an accelerated learning mode for users in a hurry.

Social influence

The platform offers three different levels of difficulty for the lessons and validation quizzes. The investor can see his level and compare himself to other users in terms of knowledge and investments.

Unpredictability

The learning pace is occasionally broken by messages from an avatar who reassures the user about his progress or shares anecdotes about the financial markets.

Prevention

The user is constantly reassured of his or her progress and level of financial literacy compared to other investors.

Rarity

Levels 2 and 3 of the lessons and quizzes are only available to experts. Some modules are available on a temporary basis. are only available to experts. Some modules are available on a temporary basis.

Possession

During his forest trail, the user accumulates seeds and breadsticks, which he can then convert via his financial institution into donations to associations of his choice.

Accomplishment

Each “Seed” obtained is a proof of the investor’s improvement. A progress bar allows him to follow his progress on the platform.

After completing a lesson, the user can download a certificate proving his or her mastery of a financial product, and giving him or her the authorization to invest in it.

The user can set goals for himself on the platform and impose challenges, such as validating modules in a minimum of time, to encourage him in his training.

Conclusion

The objective of the EduProfiler is to make individuals want to invest more and better, by allowing them to understand the mechanisms of financial products in a simple, fun and interactive way.

L’article The EduProfiler Methodology for Responding to Expectations of European Individuals est apparu en premier sur Neuroprofiler.

This is in line with a previous OECD study in 2012. It found that a significant proportion of individuals did not understand basic concepts, such as diversification.

However, Europeans are interested in financial matters and want to learn about them. According to a study by the Banque de France in 2020, 52% of French people say they are interested in financial matters and current events.

How can we explain the paradox of a low level of financial literacy, despite the interest of individuals in the subject?

A first hypothesis could be the overconfidence bias of individuals. They would overestimate their financial knowledge, even though they have little. This theory is supported by the 2012 OECD study, which shows that respondents overestimate their rate of correct answers. Indeed, they prefer to answer wrong rather than to choose the “I don’t know” option.

This phenomenon could also be due to the lack of financial training tools that are adapted to the expectations of individuals, especially young people.

With the EduProfiler, investors of financial institutions will be able to acquire the financial knowledge they need. If you have any questions about this, please send us a message.

L’article A lack of financial literacy among Europeans individuals est apparu en premier sur Neuroprofiler.

Nevertheless, Europeans are still very conservative in their investments.

According to a survey by the Banque de France, 69% of French people consider their knowledge of financial matters to be average or poor. This proportion is similar to that observed in other OECD countries and found in other studies, such as that of the Possible Finance association in 2021.

The results of a CREDOC survey on the financial culture of the French reinforce this observation: 

• Only one in two people knows that €100 invested at 2% per year leads to a capital of €102 after one year. 
• One in four people manages to find the definition of an obligation from a list of three possible answers. 
• Only 45% know what a mutual fund is and 52% know the principle of a dividend. 

In response to this social challenge, Fintech applications have emerged in recent years to help individuals better understand the mechanisms of financial products and invest wisely.

Most of them are based on gamification. Reward systems, levels, immediate feedback, avatars… are used to make users want to learn more about finance.

In this article, we present the most significant ones, comparing their advantages and disadvantages. 

Capital DNA 10x Financial Literacy

It is an American application that was developed by former MBA students from Berkeley, California, who wanted to improve the financial literacy of Americans. The model is B to C, the application is aimed at a wide audience. 

It is a free learning application, training individuals via MCQs divided into different sections on both investment and budgeting topics.

They start with basic topics such as “what is financial education?” and then move on to more technical topics such as saving, investing, borrowing etc. 

The themes, classified by level, are unlocked as clients progress.

The application also allows you to manage your budget online.

• Advantage: a game-like level system, detailed explanations and a budget management application.
• Disadvantages: few gamification elements, rather simple visual.

Profile Financial Literacy

This application, which specialises in budget education, was created in the United Kingdom and co-founded by the famous Erasmus + programme. The model is B to C.

The “ProFiLE” application aims to provide educational resources on financial education for teachers, parents and carers who need guides and educational activities to help young children aged 7-11 understand money concepts.

After choosing an avatar, the user can ask budget questions in the form of scripted message exchanges that are pre-recorded in the application.

Entirely free of charge, the topics covered are: taxes, borrowing, the value of money, having a sense of priority when shopping etc… 

• Advantages: fun avatar system, coins to be won, visual “messaging” adapted to the young target population, presence of an online platform available to teachers with role plays and exercises for young students.
• Disadvantages: rather limited application: only the quizzes are present, so you have to go to the website. 

GREENGRASP

This application was created in 2020 in Australia by John Feldman. It focuses on both budget and investment education, the model is B to C.

It is an application composed of MCQs and content on different financial topics (cryptocurrency, the financial market in general).

It can be downloaded for free from the AppStore and Google Play. It is complemented by a website where you can access articles on the following themes: managing your budget, financial independence…

The aim is to improve the level of financial knowledge via 3-minute microlearning and to democratise this knowledge by making it accessible to as many people as possible. 

The application has six different themes, each with three levels of difficulty.

• Advantage: presence of several levels with several themes
• Disadvantages: not very entertaining

Investmate

This free app, which can be downloaded from the App Store and Google Play, is backed by Capital.com. It was created in 2018 in the UK. It focuses on trading and investment education.

Playful and highly interactive, it targets the Millennials generation.

With a real community spirit, it allows users to follow, “like” and exchange with profiled users with “credibility” scores, in the same way as on social networks.

One has access to courses as well as training, with the possibility of winning cryptocurrencies.

• Advantage: presence of gamification processes, rather user-friendly content
• Disadvantage: focuses mainly on trading

The Stock Market Game

It is an American platform created by the SIFMA foundation that promotes knowledge and understanding of the financial markets for all. It is therefore a B to C model.

Access to this trading education platform is free.

This free platform trains students in trading via a simulation game.

They start the simulation with a virtual $100,000 and can train, start investing, create their investment portfolio in the market. 

The platform consists of a “Teacher Support Centre” which provides lessons, courses on different topics that students can apply afterwards.

• Advantages: in the same way as a video game, players can practice investing virtually.
• Disadvantages: few gamification elements. Focuses solely on learning to trade.

Zogo 

Inspired by Duolingo, this American e-learning application targets generations Y and Z by helping them manage their budgets.

It was created by three students from Duke University in the USA in 2020.

Partnering with over 200 financial institutions in 50 states, it allows users to be rewarded according to their progress. Its reward system allows users to convert “pineapples” into gift certificates or donations to associations.

The application also has a website with a blog, an e-learning platform and a news tab on the application.

• Advantages: many of the codes of video games are taken up: with the system of coins to be won that can be exchanged for gift cards, progress bars and different levels.
• Disadvantage: application available in the US only.

EduProfiler

Created by the French Fintech Neuroprofiler, a specialist in cognitive science, gamification and finance, EduProfiler trains individuals in the mechanisms of financial products in a fun and interactive way.

The platform offers a fluid and interactive experience to its users. Via a fun and personalised dashboard, users can choose to explore new financial concepts either through short infographics, text or training games that allow them to understand the mechanisms of the products by experimenting and having fun. Each game is followed by a reward for success, and immediate corrective feedback for incorrect answers. 

The gamification of the course allows the user’s attention and interest to be constantly maintained. Each module corresponds to the discovery of a concept or a product. The user can understand the mechanisms in a few minutes. They are thus encouraged to train progressively and frequently on their mobile phone, in order to consolidate their knowledge.

EduProfiler offers training modules for all levels, from the basics of investment (shares, bonds, funds, etc.) to more technical concepts (structured products, derivatives, etc.). 

In addition to democratising financial education, EduProfiler also makes it possible to meet the MIFIDII regulatory requirements for assessing financial knowledge. 

• Advantages: Fun content, using gamification processes, intuitive to use. In line with MiFIDII regulations.
• Disadvantage: only available through Neuroprofiler’s financial institution clients.

L’article Gamification and financial literacy, which applications to use? est apparu en premier sur Neuroprofiler.