Trust in financial institutions is limited. For instance, only 1 out of 5 adults highly trusts in banks in countries like Bosnia and Bulgaria, while in Romania only 1 out of 8 highly trusts in banks, according to World Bank’s Financial Capability and Consumer Protection survey, launched yesterday on its website. In all countries, trust in insurance companies appears to be even lower. These findings underscore the importance of initiatives designed to enable people to plan ahead and for the unexpected, and to choose financial products which fit their needs best. Further, they show the need to build trust in financial institutions by creating necessary financial consumer protection frameworks.
The WB survey makes a connection between financial education and the confidence in financial institutions. An increasing number of countries are developing national strategies for financial education and implementing programs to enhance people’s financial capability. At least 36 countries have already established or are in the process of designing a national strategy for financial education according to the OECD. “Boosting people’s ability to take sound financial decisions has emerged as a new policy objective, both in developed and developing countries.
The recent financial crisis has reinforced the view that being financially capable is important”, the survey shows.