Financial Competence Framework

Definition

A Financial Competence Framework is a conceptual basis on which to build a variety of financial education policies and measures towards improving Financial Literacy

Objectives

A competence framework aim to provide a set of outcome-based competences that can be used to:

• support the development, implementation and update of national financial literacy strategies.
• support the design of Financial Education programmes and the development of financial education learning materials and tools.
• facilitate the assessment of financial literacy levels and the evaluation of financial literacy initiatives.

Joint EU/OECD-INFE financial competence framework for adults

In 2021 the European Commission and the OECD-INFE (OECD International Network for Financial Education) started a collaboration to develop a joint EU/OECD-INFE financial competence frameworks for adults. The objective of the EU/OECD-INFE financial competence framework for adults is to promote a shared understanding of financial competences for adults amongst EU Member States and national authorities, educational institutions, industry and individuals. In addition, it provides a basis for a more coordinated approach among EU and national policymakers. By supporting efforts to improve financial literacy, the framework aims at contributing to the overall goal of improving individual financial well-being. The framework focuses on competences pertaining to personal finance.

Content Areas

• Money and Transactions. This content area covers the knowledge, skills and attitudes related to: the different forms of money and currencies; income; prices, payments and purchases; and the importance of financial records and contracts.
• Planning and Managing Finances. This content area covers the knowledge, skills and attitudes related to budgeting; managing income and expenditure; saving; investing; longer term planning; retirement; credit; debt and debt management.
• Risk and Reward. This content area covers the knowledge, skills and attitudes related to the identification of risks; financial safety nets; insurance; and balancing risk and reward.
• Financial Landscape. This content area covers the knowledge, skills and attitudes related to regulation and consumer protection; rights and responsibilities of consumers; the use of financial education, financial information and financial advice; financial products and services; scams and fraud; understanding of tax and public spending; and external influences on financial decisions.

Usage in the Open Risk Manual

The Open Risk Manual adopts financial competence frameworks to classify (where applicable) entries according to their relevance to specific financial competences.