Exchanges have a role to play in driving financial literacy that addresses local needs

By: Vanessa Lau, Group Chief Financial Officer, HKEX Oct 2021

Alan Greenspan, economist and former Chair of the U.S. Federal Reserve from 1987 to 2006, once said, “The number one problem in today’s generation and economy is the lack of financial literacy.”

We are not sure whether it is the number one problem, but financial literacy is something that we talk about a lot at HKEX. And with good reason. It’s one of the most important skills that someone can have. It touches upon every aspect of our lives in today’s modern, integrated world. It enables individuals to manage their finances and reach their personal and professional goals, and it contributes to the long-term sustainable growth and prosperity of our society.

Even in some of the most developed economies, financial skills are very often not taught in school. These skills take time and discipline to master, and early immersion is essential to ensure our collective long-term financial health. As the world of finance evolves, technology and innovation are further empowering our personal financial journeys and posing new risks to the way we manage our money. Financial literacy matters, perhaps now more than ever.

Financial literacy means different things to different markets or communities. According to an independent OECD survey[1], Hong Kong has the highest levels of overall financial literacy among participating countries and economies. However, distinct financial behaviour patterns remain between Hong Kong generations. According to a recent survey conducted by Hong Kong’s Investor and Financial Education Council (IFEC), the older generation plans and manages its finances more prudently, while the younger generation tends to put financial planning aside in favour of a “live for today” attitude.

Figures show that 35% of young working adults below the age of 30 often spend more than they can afford, while 32% are in debt.[2] Such figures highlight the need to address the financial vulnerability of the next generation, who play a pivotal role in our economy.

Advocating financial literacy in our markets and beyond

At HKEX, we believe financial markets are more than just a place to trade securities; they fuel the growth of businesses, shape industries and create jobs. This is where the financial world meets the real economy, and this is where our commitment to sustainable social and economic development comes in.

Sitting at the heart of Hong Kong’s financial markets, we know that we have a big role in helping to promote good financial education within our community. Through our tailored financial education and literacy initiatives, we support a variety of stakeholders, including market participants, investors, and employees, helping them to make informed and financially wise decisions.

As a market operator, we utilise our expertise and resources to champion financial literacy in our markets in a range of ways, from seminars and events to educational videos, factsheets and websites. We also work with various industry associations and business partners to deliver market education campaigns, raising awareness of the latest market developments and best practices.

HKEX in the community 

Financial empowerment in the community contributes to its overall stability and long-term health. In June 2020, we were proud to launch HKEX Foundation, our dedicated charitable channel. Financial literacy is one of its four key focus areas; the others are diversity and inclusion, poverty relief, and environmental sustainability.

Through strategic partnerships, community engagement, and philanthropic contributions, we support a wide range of financial literacy initiatives – working with primary students, young adults, the elderly, and minority groups, and partnering with NGOs to address the financial vulnerability of these groups in our community.

One good example is our multi-year Personal Finance Ambassador Programme in partnership with IFEC and local charity organisation, St James’ Settlement. Through a half-year educational programme, we equip young people with essential financial skills for the future and turn them into ambassadors to influence their peers in helping them manage their personal finances.

Another example is the work we do with migrant domestic workers, through our partnership with ENRICH, a local NGO. Together we have helped more than 300 domestic workers to budget for the long-term, run their finances using technology, and support their understanding of today’s complex financial world.

Our ultimate goal with our financial literacy programmes – as with all our market and community engagement work – is to create momentum for positive change within society and build a sustainable future for everyone.

Financial literacy needs our collaboration

At HKEX, we understand the true value of financial education and its power in creating opportunities for a better life for all. There is still much to be done. As we continue to build a marketplace of the future, we are conscious that we must invest in our people and our community. We hope to leverage our position of responsibility and influence to encourage our stakeholders to play a role in the long-term financial health of our community, for the prosperity of all.