When our customers know how to make better financial decisions, they can become better off. We educate our customers by providing them with an understanding of how they can plan for a better future and by offering fairly designed products and services.
Why we invest in
When customers are empowered to make informed and effective decisions, they can move toward a better future. In turn, this success positively affects their households, the communities around them and our Bank.
Learning by doing: promoting financial knowledge in Chile
Recent research from Chile’s National Institute for Youth, shows that many Chilean youth from ages 15 to 29 struggle with excessive debt. Four percent of Peruvians between the ages of 15 and 19 years old carry debt; and this amount increases as they get older, of those between the ages of 20 and 24, 36% carry debt; and 55% of Peruvians aged 25 to 29 years old carry debt.
Ana Paula Aleixo, Scotiabank Chile’s CSR Manager, believes that excessive financial burdens limit the future of young people and jeopardize Chile’s long-term financial well-being. “Financially healthy individuals contribute to a better society. Lines of credit, loans, and mortgages can be used to purchase items that can take a long time to save for and can allow a young person to build a credit rating by making their repayments on time — but only if they are used responsibly.” she says.
“Young people in Chile desperately need to be educated on how to use financial resources wisely — for the betterment of everyone.”
A hands-on approach to financial education
123 Emprender (123 Let’s Start!) is a Scotiabank-sponsored initiative in Chile that seeks to promote financial knowledge amongst young people. A partnership between the Bank, Juega Más, and the Center of Excellence in Economic and Consumer Psychology at the Universidad de la Frontera, 123 Emprender trains Chilean teachers to expand students’ financial knowledge while broadening their financial horizons. Unlike traditional financial literacy classes, the program is built on the belief that students learn best through hands-on projects, where they can feel a sense of responsibility for long-term project outcomes.
Improving student health
Prior to 123 Emprender, the health unit at Centro Educacional Mariano Egaña public school in Peñalolén — a commune in Chile’s Santiago Province — was understaffed and in need of supplies and materials. Through the guidance of 123 Emprender-trained teachers, students dramatically improved these conditions. After determining what supplies were needed in the health unit, students presented a business plan to Scotiabank that gave them access to a small amount of capital. Adhering to the strategy outlined in their business plan, students used this money to create material for fundraising activities — such as posters, leaflets, and other promotional items.
The success of these campaigns raised awareness for the health unit among students, parents, and the local community. As a direct result of their efforts, the school has committed to direct 10% of the money raised through all fundraising campaigns directly to the health unit. This has created a reserve fund that is teaching students how to procure items, manage a budget, and save.
“We do not just want to give students money and teach them how to make a budget,” says Ana. “We want to encourage them to think bigger and ask, “What can I do with this money? How can I make it grow in order to benefit other people’s lives?" We believe that this is the key to real financial education.”
What started as a teacher's development program to promote financial education has turned into a project with broad social implications for the entire Peñalolén community. The 700 students that attend Centro Educacional Mariano Egaña will benefit as the school’s health unit improves over time. Parents and the community rallied together to prioritize student health. Students gained hands-on experience starting and managing a business, and are now working to ensure that the project will be sustainable for generations of future students.
The value of financial literacy
As Ana explains, when you give a student financial understanding, you empower them in other ways as well. “Finance is an essential part of everyday life. Teaching children to manage financial resources teaches other important life lessons — knowing its limits, tolerating frustration, planning goals… All of these lessons can be applied to other areas of life.
“Companies increasingly have to take charge of their impacts on society. And the biggest impact we have as a bank is on the relationships between people and their finances. We are responsible to ensure that the programs and services we offer are good for our communities — so we can contribute to development and growth.”
For elementary school teacher Paul Wisniewski, talking with his students about money is more than part of his math curriculum. It’s about setting his students up for a life of success by empowering them with financial knowledge.
Paul, a 7th grade math teacher at St. Gabriel’s Catholic Elementary School in Burlington, Ontario, has been teaching kids for 26 years. In his experience, talking about money is a great way to engage students. “Every kid has their favorite subject, but when you talk money, every kid loves it.”
Like many other students throughout Canada, this year students in Paul’s class participated in the Scotiabank-sponsored program Talk With Our Kids About Money (TWOKAM). Developed by the Canadian Foundation for Economic Education (CFEE), the program seeks to help kids become more knowledgeable about money so they can make better, more informed financial decisions in life with activities and a website that promotes financial knowledge for youth and encourages conversations between parents and children about money. TWOKAM includes an annual Talk with Our Kids About Money Day — in April each year.
As part of Talk with Our Kids About Money Day, students throughout Canada can participate in Money Fairs in various provinces and locations. Based loosely on the model of a science fair, Money Fairs give students a chance to present findings on financial subjects of their choosing.
Annika Sharma, a seventh grade student at Hilltop Middle School, did a project about the price of transportation in Canada. “Before the money fair, I didn’t know how much each car would cost or how much you would need to put into paying interest on a car loan. We took gas prices into account too. Through research, I learned a lot.”
Annika determined that transportation often involves a trade-off between cost and convenience. She found that public transit was the least expensive form of transport, but that “it could be hard to use if you had many places to go or lots of things to bring with you.” On the other hand, she saw that while cars were much more expensive, many people were willing to pay a premium for them, because of the freedom and convenience they offered.
Learning from each other
In addition to learning about the trade offs associated with transportation, Annika was also able to learn from her classmates’ projects: “One of my classmates did a project about keys to money management. It taught me that saving money is really important and not to spend everything that you earn — so I can save up for university as a kid or when I’m older, save up for retirement. And also if something breaks in your house, you’ll have the money to quickly get it fixed.”
Paul also noticed how his students learned from each other: “Of course, students learned from doing their own research, but they also learned from listening to one another. I’m used to having to lead when I teach, but when we were doing projects for the Money Fair, the students led each other.”
This year is the first time that Beverly Bolton, an employee who has been with Scotiabank for 38 years, participated in Talk with Our Kids About Money Day. She was impressed by what the program accomplishes: “You can tell that kids come from various backgrounds, and maybe different conversations are going on at home about money and how you spend and how you save. You can see that money really wasn’t something they talked about at home or at school. I certainly recognize that it’s never too soon to start understanding what money can do for you.”
The partnership between Scotiabank and CFEE on this program sets kids up to become better off — an important step in creating a better financial future for everyone. Says Paul, “The younger we start teaching kids about financial literacy and how to be financially responsible, the better off they will be in the long run.”
Beverly agrees, “I think with money regardless of your age, it’s never too young to start learning about managing money.”
Whether you accessed this website via computer, tablet, or phone, you probably already have some inkling of how much technology has come to shape our day to day lives. Most of us rely on technology as an integral part of our routine, from getting directions to streaming favorite music to managing our finances.
A wealth of information
The implications of this technological shift are familiar territory for Anna Iemma-Bonanno, a project manager at Scotiabank who has been working to envision how the bank of the future will serve its customers.
She’s seen how the vast amount of information available at our fingertips has led to new types of behavior: “People go online, they read newspapers, and they come to the bank already very well informed. In comparison to ten years ago, customers tend to do quite a bit of research.”
This wealth of financial information is making customers increasingly more independent. “Now, our customers are saying, ‘In situations where transactions are simple, I can basically self serve. When and if I feel like I need an expert, I'll engage with [one] to get a recommendation.’” Anna explains.
The knowledge gap
However, when it comes to serious financial decisions, lots of information does not always equal a clear course of action. In fact, when a financial decision can have long-term implications over one’s well-being, too much data can actually be overwhelming. In these cases, says Anna, “Customers still need to engage with an expert who can validate that a decision is correct and it is the right thing for them.”
And that is precisely where Anna and her team work, acting to fill the “knowledge gap” where customers feel like they have some financial understanding, but don’t necessarily feel empowered to make large decisions based on that information alone: “We’re trying to elevate the customer’s role from passenger to copilot.”
Anna is part of the team that created Scotiabank Presents, a series of classes that promote financial knowledge on a variety of real life topics. “The curriculum is built around the big life events that our customers face; going to school, sending kids to school, retiring, short-term goal planning, wanting to know how to manage their budget; those sort of things,” says Anna. “One of the most popular classes is Do You Really Need a Million Dollars to Retire? The retirees love that class.”
Scotiabank Presents classes are taught in the foyer of the new Scotiabank Solutions branches in Guelph and Kitchener, Ontario, Canada. Classes are posted on a monthly calendar both in-branch and online and prospective attendees can sign-up for sessions either in person or digitally. The classes are offered free of charge to any member of the community, whether a customer of Scotiabank or not.
According to Anna, “There aren’t any strings attached and there’s no product push. It’s general financial information with a community offering. We carefully designed the courses to make sure that at the end, it wasn’t ‘See your advisor for your new credit card.’ That’s not the intent of Scotiabank Presents.”
Taking the Longview
Rather, the classes are designed with the long view in mind — making customers and the community financially healthier. When people are equipped to make better financial decisions and plan for their future, everyone benefits — from customers, the community, and even Scotiabank. Or, as one class participant put it: “There’s a natural fit for banks to look at education as a service — to help people become educated so they can understand their finances. It’ll make people loyal, it won’t be just about nickels and dimes.”
Scotiabank Presents is in a pilot phase, and Scotiabank is working to refine the class curriculum. But Anna is optimistic about the role that these classes will play in charting the future of the bank. “The research [leading to these classes] was done in Canada to benefit the Canadian market. But, that being said, we’re proof of concept and we’re looking at full-service locations everywhere offering these classes. That’s something we’re working towards.”
Which is good news for the future of financial knowledge — because when customers know how to make better financial decisions, everyone can become better off.