Online Community of Practice: Australian Securities & Investment Commission National Financial Literacy Strategy

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1 Online Community of Practice: Australian Securities & Investment Commission National Financial Literacy Strategy The Australian Securities & Investment Commission (ASIC) leads the National Financial Literacy Strategy (NFLS) to help promote financial literacy as It provides a practical framework for action to guide and encourage all those with a role to play in improving financial literacy for Australians (ASIC, 2015a, para 1). This online community of practice (OCoP) is is a national forum that meets monthly, via video conference, to share experience, information and expertise on financial literacy research, programs and projects. The CoP strengthens links and encourages discussion between those who work on financial literacy issues (2015e, para. 1). The goal of the NFLS is to provide financial literacy training that will help improve the longterm behavioral actions, in regards to the financial health, of Australians that will improve the quality of their financial lives. The NFLS was launched in 2011; it requires a multi-faceted approached in order to have sustainability and provide gradual improvement over time (ASIC, 2015a). According to ASIC (2015b), the NFLS is framed around four key focus areas, to promote a nationally coordinated approach to improving the financial wellbeing of Australians (para. 1). ASIC recognizes the limits of education and has developed a framework that focuses on building educational pathways toward financial literacy, using innovative solutions to provide tools and resources on finances, and working in partnerships to promote best practices (ASIC, 2015e). How NFLS Functions Prior to launching the NFLS, as background to the Strategy 2011, ASIC published a stocktake of learnings about financial literacy based on research about people's financial knowledge and behaviour, and the strategies and tools that might influence financial decision-making (2015b,

2 para. 3). The NFLS is supported by the Australian Government Financial Literacy Board, numerous business and industry organizations; such as Insurance Council of Australia and community and non-profit organizations; including Financial Literacy Australia and The Salvation Army Eastern Australia (ASIC, 2015d). Each organization launches financial literacy initiatives that can be accessed on NFLS website. One of ASIC s core activities was the development of the MoneySmart website and teaching program that provides guidance, resources, and tools on money management. Topics include managing your money, borrowing & credit, investing, and insurance just to name a few (MoneySmart, 2015). How NFLS contributes to learning and building knowledge The NFLS created a strategy report for the development and delivery of its initiatives to improve financial literacy and enhance the quality of Australians financial well-being (ASIC, 2015c). According to ASIC (2015c), Financial literacy is about understanding money and finances and being able to confidently apply that knowledge to make effective financial decisions (p. 2). Due to the evolution of the Australian society and financial system, growing range of financial products, changes in demography, and consumer responsibility it is with this information in mind that ASIC set out to decrease the knowledge gaps of financial literacy for consumers and investors (ASIC, 2015c). Knowing how to make sound money decision is important because It affects quality of life, opportunities we can pursue, our sense of security and the overall economic health of our society (ASIC, 2015c, p. 2). According to ASIC (2015C), research has shown that consumers are knowledgeable and confident about budgeting but less so about complex money matters such as investing and saving for retirement. Several principles that the strategy is founded upon include diversity, engagement, inclusiveness, knowledge and empowerment, and measurement (ASIC, 2015c). Providing good quality and trustworthy

3 information that promote taking action is vital toward completing the goals and initiatives of the program which include empowering consumers to work to improve their financial well-being. ASIC believes educating consumers in complex financial literature to help them gain a better understanding of the financial world around them through communication and guidance that is regulated. According to Sukumaran (2015), Financial inclusion provides access to various financial services whereas financial literacy provides awareness (p. 64). According to ASIC, (2015c, p. 10), achieving literacy goals were done by providing consumers with the following: education that is integrated into the Australian curriculum ensuring sustainability of school programs by providing professional learning to teachers having information and ongoing support with a continuum of engagement of skills and knowledge to support action developing resources and web-based materials achieving behavioral change by promoting financial well-being by influencing public policy to design products toward maximizing outcomes coordinating initiatives for the long haul with partnerships, knowledge sharing, and networking creating the Program for International Student Assessment (PISA) and measuring and tracking overall Australian financial literacy rates What makes NFLS successful The strategy was developed due to the background of the global financial crisis. Due to risky behaviors of financial institutions, regulators, and experts; the lack of understanding in households caused undue hardship as individuals did not fully understand the financial risks of their decisions (ASIC, 2015c). NFLS worked to restore consumer confidence by promoting

4 financial literacy, accountability, and transparency about finances. NFLS is still ongoing in its efforts to help its citizens do better financially. The initiative has been sustained for the last several years and developed another strategic plan to continue its efforts and expand it program based on stakeholder assessment and support through DE theories that contribute to the success of NFLS Online Collaborative Learning Theory (OCL) in DE contributes to the success of NFLS as its processes include collaborative learning and knowledge building. Through partnerships and government funded initiatives the NFLS has been able to share resources and tools as well as gain knowledge from subject matter experts and provide that information to the public in an open community. Online tools can be used to expand and enhance discourse ad knowledge building while engaging students in learning toward constructing knowledge together (Harasim,2012). According to Harasim (2012), the ability to engage in group, or many-to-many, discourse is the basis for collaboration and knowledge building (p. 104). In addition, the MoneySmart and ASIC website ask for help from the community in advancing and expanding its program. This allows for creative and innovative information sharing that are part of divergent thinking; which is a process that generates ideas and questions or solutions (Harasim, 2012). Monitoring and assessing the success of NFLS According to ASIC (2015c), the strategy report This strategy is a living document that will be publicly reviewed and consulted on two years after it is released (p. 1). The ASIC has recognized the need for evaluating its programs. I would monitor and assess this program by doing focus groups, surveys, and reports based on the feedback from consumers. According to Harasim (2012), qualitative and quantitative data provide valuable feedback into the nature and level of participation. In addition, that social and cognitive discourse can be studies in online

5 communities (Harasim, 2012). I feel it is best practice to get information from the source. Ask consumers questions and have them reflect and determine their own specific, achievable, and measurable goals that that have to develop an action plan to execute. Creating a learning environment that is positive, welcoming, and interactive ca go a long way toward not only providing educational resources but promoting action. Words without action behind them mean nothing. I agree with ASIC in their statement that Our approach stresses the importance of research as the foundation of sound, evidence-based proposals, and evaluation to help us understand what works and what does not (ASIC, 2015c, p. 8). Conclusion The ASIC s financial literacy strategy is a catalyst toward leading change through innovative technologies and practices. ASIC recognized a need for its citizens to increase their financial knowledge and rose to meet this challenge head on. Acknowledging the problem that there was lack in understanding of complex financial processes the ASIC launched the NFLS in 2011 toward achieving the goal of promoting financial knowledge as a solution. It has continued to grow and educate Australians on the need for financial literacy and addressed consumer needs with compassion and understanding through its educational tools and resources, particularly its MoneySmart initiative. Accountability and measurement of its program is ongoing as NFLS continues to expand and created strategies for financial literacy training through the year 2017.

6 References Australian Securities & Investment Commission. (2015a). National Financial Literacy Strategy. Retrieved from Australian Securities & Investment Commission. (2015b). Strategy Retrieved from Australian Securities & Investment Commission. (2015c). Strategy Report. Retrieved from Australian Securities & Investment Commission. (2015d). Supporters. Retrieved from Australian Securities & Investment Commission. (2015e). What is the community of practice? Retrieved from Harasim, L. (2012). Learning theory and online technologies. New York, NY: Routledge. MoneySmart. (2015). Financial Guidance. Retrieved from Sukumaran, K. (2015). Financial Literacy -- Concept and Practice. DAWN: Journal for contemporary research in management,