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 aims 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 an overall financial competence framework to classify (where applicable) entries according to their relevance to specific financial competences.
• Sustainable Finance Competence List